The deal covers an area of approximately 1,000 square kilometres at Rong Chang Bei in the Sichuan Basin. In March this year, BP and CNPC signed their first shale gas production agreement on the adjoining Neijiang-Dazu block. As with the earlier contract, CNPC will operate the Rong Chang Bei contract.
BP’s Energy Outlook (2016 edition) expects that, by 2035, shale gas will account for 25% of the total gas produced globally and China will become the world’s largest contributor to growth in shale gas production.
Bob Dudley, BP Group Chief Executive, commented: “We’re making further progress in our strategic partnership with CNPC and deepening our business in China with this second shale gas agreement.
“Combining CNPC’s operational expertise with BP’s technology and experience, we now expect to leverage the synergies between these blocks. This new agreement clearly demonstrates our continued commitment to invest in projects in China which will deliver long-term value to BP, to our Chinese partners and, most importantly, to the country.”
This deal marks another achievement under BP and CNPC’s framework agreement on strategic cooperation that was signed in October 2015 during the visit to the UK of The President of The People’s Republic of China, Mr. Xi Jinping.
During this visit, the former British prime minister and chancellor, respectively David Cameron and George Osborne, sweet-talked the Chinese into co-funding the planned £18 billion Hinkley Point-C nuclear power station plan with France’s EDF Energy.
This has now been delayed pending a ‘review’ by Theresa May, who subsequently succeeded Cameron as prime minister after he lost the campaign to keep Britain in the EU-bloc.