BP has signed a second production sharing contract (PSC) with China National Petroleum (CNPC) for shale gas exploration, development and production.
The companies signed their first PSC in March this year on the adjoining Neijiang-Dazu block.
The second PSC covers an area of about 1,000km² at Rong Chang Bei in the Sichuan Basin and will be operated by CNPC.
BP Group chief executive Bob Dudley said: “By combining CNPC’s operational expertise with BP’s technology and experience, we now expect to leverage the synergies between these blocks.
“This new PSC clearly demonstrates our continued commitment to invest in projects within China that will deliver long-term value to BP, to our Chinese partners and, most importantly, to the country.”
The agreement also covers possible future fuel retailing ventures in China, global new oil and LNG trading opportunities and carbon emissions trading.
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By GlobalDataCNPC chairman Wang Yilin said: “CNPC and BP's existing cooperation covers various areas including upstream and retail business in China, overseas upstream exploration and development and international trading.
“Building upon the framework agreement on strategic cooperation signed last year, the two unconventional resource PSCs signed this year are manifestation of our deepening cooperation.”
The exploration of shale gas will serve as a new strategic focus for China and is expected to benefit the country’s energy mix in the long term.
According to BP’s Energy Outlook, by 2035 shale gas is expected to account for a quarter of the total gas produced worldwide.
BP China president Edward Yang said: “The two recently signed shale gas PSCs not only underline BP’s continued confidence in the Chinese market, but also reaffirm our dedication to support China in unlocking its potential for more sustainable energy development.”
