UK-based oil and gas company BP is reportedly planning to withdraw from drilling shale gas in China following poor results.
The company will quit from two production sharing contracts (PSC) that involve drilling shale gas in the province of Sichuan, Reuters reported citing unnamed sources.
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International oil majors such as Royal Dutch Shell, Exxon Mobil, ConocoPhillips and Eni have already left the Chinese shale gas drilling sector for similar reasons.
In March 2016, BP signed an agreement with China National Petroleum (CNPC) to explore natural gas potentiality at shale rock formations in the Neijiang-Dazu block in Sichuan.
In the same year, it entered the second agreement to look for shale gas on the Rongchangbei block.
Sources told the news agency that BP planned to quit from these PSC agreements after the drilling of eight to ten wells delivered unsatisfactory results.
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By GlobalDataAccording to IHS Markit, one of the wells drilled to a depth of 4,368m delivered around 10,000m³ of gas per day during test production.
The figure is significantly less compared to other CNPC shale gas wells in the same geological zone.
Last week, BP CEO Bob Dudley also said in a news conference that the Sichuan projects are facing ‘great challenges’.
If BP withdraws from the PSC agreements, the Chinese shale gas sector will be left to be dominated by local firms, reported Reuters. However, BP did not confirm its move.
