Three companies to search in Xinjiang region for new energy sources
Under the supervision of its parent company, China National Petroleum Corp (CNPC PetroChina - along with Royal Dutch Shell and Hess Corp - will start exploring for shale oil in the Santanghu Basin in the latest effort to beef up the nation's energy capabilities. PetroChina will benefit from foreign expertise, while Shell and Hess will continue to gain a foothold in the world's top energy market.
CNPC has outlined the main goals of the cooperation to “introduce advanced technology, production and management methods in unconventional oil and gas exploration and development ... and to accumulate technology and experience.” While the three parties are still negotiating business terms on block divisions, it is understood that Shell and Hess will pick up the costs of exploration and then share all output accordingly with PetroChina.
Historically, firms operating in the Santanghu Basin, situated in the northwestern Xinjiang region, have struggled with low oil reserve content and underdeveloped domestic technology, despite the relatively dense proliferation of wells. The companies hope that new technology will increase output and profitability in the region.