Wood Mackenzie has reviewed recent activity in China黑料社檚 shale gas sector, highlighting the different strategies adopted by two Chinese NOCs, PetroChina and Sinopec.
In a presentation at Gastech 2014 in South Korea, the research firm noted that strong demand for gas is continuing to attract investment in China黑料社檚 upstream sector, however divided priorities may further delay progress in domestic unconventional gas projects.
PetroChina
黑料社淲hile much 黑料社榟ype黑料社� surrounds China黑料社檚 shale sector, on the ground investment is focused elsewhere. PetroChina - comfortably the largest shale gas acreage holder - devoted just one percent of its overall 2013 budget to shale gas. Conventional and tight gas opportunities are top of its priority list, and considering its recent performance it黑料社檚 hard to argue with that strategy,黑料社� explained Craig McMahon, Head of Asia Upstream research for Wood Mackenzie.
McMahon noted considerable growth in tight gas production and PetroChina黑料社檚 recently announced discovery of 10 trillion ft3 of conventional gas as evidence of the company黑料社檚 approach.
Sinopec
Wood Mackenzie added that PetroChina is not the only shale gas player in China: 黑料社淪inopec黑料社檚 acreage position may be smaller, but it is now setting the pace in the Sichuan Basin. The Fuling discovery will be the first commercial shale development in China,黑料社� McMahon explained. Sinopec is now set to ramp up drilling and investment on the asset and could be producing material volumes as early as 2015.
Conclusion
In conclusion, McMahon remarked: "It is interesting to note the different strategies of China黑料社檚 two major NOCs on domestic shale. International Oil Companies (IOCs) are making less progress, as they struggle with an investment climate that does little to support their strategic goals. But with PetroChina黑料社檚 attention elsewhere, might they be better utilising IOC expertise and capital to unlock China黑料社檚 vast shale resource?"
While IOCs involvement in China黑料社檚 shale gas sector to date is small compared with Chinese NOCs, with the government intent on stimulating private investment and a growing dependence on energy imports, that situation could easily change.
Adapted from press release by