Sinopec to Explore for Shale Gas

Sinopec Group has started exploring the Pengshui shale gas block in southwest China to evaluate the resource potential as the company ventures into unconventional oil and gas exploration, the company said Wednesday in a report on its website.

The Pengshui block is located in the Yunnan-Guizhou plateau and Sichuan basin and was registered in August this year, said Sinopec Group, which is the state-owned parent of Hong-Kong listed Sinopec Corp. and the country's largest refiner.

Sinopec has deployed a team to study an area covering 453.3 sq km to collect seismic data on the shale gas potential.

China's Ministry of Land & Resources is due to launch its initial bidding round for shale gas licensing. This is the first time Beijing has offered oil and gas resources via a commercial licensing bidding process. Oil and gas resources are usually offered to companies via a registration process.

Four local oil companies:  CNOOC, PetroChina, Shaanxi Yanchang Petroleum Corp. and Sinopec, will be permitted to participate in the bid for six blocks.

The six blocks -- three in Guizhou, one each in Chongqing, Anhui and Zhejiang -- cover 40,000 cubic sq km in area.

Source: China Petrochemical News

Look for the launch of  NATURAL GAS FOR ASIA, focused on unconventional resources in Asia, January 2011.