Chinese Ministry of Land and Resources has agreed to extend exploration time of shale gas blocks to five years from three years, said Lei Huaiyu, chief geologist with China Huadian Clean Energy Company.
Speaking at a recent industry meeting, Lei said exploration of blank shale gas blocks needs longer exploration period and China Huadian Corporation is exploring its licensed shale gas blocks. "We're carrying out assessment and could make precise judgment on prospects and value of our shale gas blocks in end of 2017," said Lei.
China licensed exploration rights of two shale gas blocks in 2011 and 16 shale gas blocks in 2012 and state-owned oil giants nearly had no presence on lists of final winners of the exploration rights. "We welcome the participation of private companies and local government in current period of shale gas exploration characterized with high risks," said Jin Zhijun, president of Petroleum Exploration and Production Research Institute with Sinopec Corp. (SNP.NYSE; 00386.HK; 600028.SH).
Jin predicted that China would produce 20 billion to 30 billion cubic meters of shale gas by 2020. Chinese accumulated shale gas output is likely to reach 5 billion cubic meters by the end of 2015 including 1.5 billion cubic meters from PetroChina (PTR.NYSE; 601857.SH; 00857.HK) and 3.5 billion cubic meters from Sinopec Corp. Dive of international oil prices doesn't have significant impacts on domestic shale gas exploration and costs of wellhead shale gas stays at around 1.5 yuan per cubic meter with some profit margin, said Guo Jiaofeng, an expert with Development Research Center of State Council.
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