British Petroleum (BP) and China National Petroleum Company (CNPC) inked a production sharing contract (PSC) for shale gas exploration, development and production activities in the Neijiang-Dazu block in the China’s Sichuan Basin, according to press statement of BP on Thursday.
“We are pleased to reach this significant milestone as part of our strategic partnership with CNPC, building on our successful cooperation in and outside of China,” said Bob Dadley, BP Group Chief Executive.
The deal is the first PSC of BP Group in China and it includes an area of 1.500 square kilometers.
“We are looking forward to working together with CNPC on technology, operational and subsurface techniques in unconventional resources. We will bring our worldwide experience to our first unconventional gas project in onshore China with CNPC. We will combine this with CNPC’s knowledge and experience to bring gas to China’s growing clean energy market. China continues to be an important part of BP’s portfolio.” added Dudley.
In addition to shale gas activities, PSC also involves fuel retailing activities in China, exploration of oil and LNG trading opportunities globally.
“CNPC and BP's existing cooperation covers various areas including retail business in China, overseas upstream exploration and development and international trading. Building upon the framework agreement on strategic cooperation signed last year, this unconventional resource PSC is a manifestation of our deepening cooperation. By leveraging the parties' complementary advantages, CNPC and BP will jointly realize the efficient development of unconventional resources.” stated Wang Yilin, CNPC Chairman.
According to the production sharing contract, China will be the operator of the project.
BP and CNPC had signed the strategic cooperation agreement during the official visit of Xi Jinping, President of China to the UK on October 21, 2015.
By Ugur Ertas