Shell and China’s Sinopec are cooperating to discover shale gas potential in central China in which small scale of fuel prospecting has been finished.

 

China has drawn the international attention because it is thought to possess the largest shale gas resource. But Shell is the first one to sign a contact to share in China’s energy among the many production hunter such as Shell, Exxon Mobil, Chevron, Eni and Total

 

Three wells at Xiang E Xi which is located in the boarder of central Hunan, Hubei and Jiangxi provinces are planned to drill by joint ventures. Shell and Sinopec has responded actively with finishing the drilling well of the one among the three which is named Liye-1.

 

It was not solemn reported the June 2012 joint study agreement which is specially outlined for the XEX block. 

 

Actually the Liye-1 well was drilled last August. With a not satisfying hydraulic fracturing result, it was completely covered 

 

Sinopec is the main host of the project. It is now in the second well, Engye-1 drilling task with Shell. The third well will be drilled later.

 

Although China is a large country, it is still in the elementary developing stage in the fuel discovery technology. With most of the 150 exploration wells drilled in and around the Sichuan basin, the profitable output is very slight.

 

Shell is also cooperated with the largest oil and gas producer Petrochina in China to finish the Fushun-Yongchuan block estimation. They will begin production after 2014.

 

Shell has been the first China’s investor to share in shale gas product with a contract signed to develop the Sichuan block in March last year. Its target is to obtain the maximum benefit and get a boom from the project, thus making it manage to transform the U.S. energy market.

 

Shell has invested $ 1 billion on the China’s emerging shale gas development in Sichuan this year.

 

The investment is in accordance with the budget Shell had planned last year to develop China’s shale gas.

 

Shell has been charged $2.2 billion due to its weak position in U.S. shale business. The company has also given up its original target to deliver 4 million barrels per day.

 

Shell will be through a long time to recover and benefit form its shale gas projects because it did not get a very satisfied result in short times.