Image courtesy of BP/Flickr.

BP said Thursday that it has signed a second shale gas production sharing contract (PSC) with China National Petroleum Corporation (CNPC).

The PSC was signed in late July and covers an area of about 386 square miles at Rong Chang Bei in the Sichuan Basin.

The contract covers shale gas exploration, development and production, BP said.

BP and CNPC signed their first shale gas PSC in March for the adjoining Neijiang-Dazu block.

CNPC will serve operator for both contracts.

In October, BP and CNPC signed a framework agreement on strategic cooperation during a visit to the United Kingdom by the President of The People’s Republic of China Xi Jinping.

In addition to unconventional resource exploration and development, the framework agreement covers possible future fuel retailing ventures in China, potential new oil and LNG trading opportunities globally and carbon emissions trading and the sharing of knowledge about low carbon energy and management practices.

“We are pleased to be making further progress in our strategic partnership with CNPC and deepening our business in China. This second shale gas PSC in China builds on the successful cooperation we are already seeing with the Neijiang-Dazu PSC signed in March,” BP Group Chief Executive Bob Dudley said.

BP’s latest Energy Outlook expects that shale gas will account for a quarter of total global gas production by 2035.

China is expected to become the world’s largest contributor to shale gas production growth during that same period, according to BP.


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