Aiming to expand its international unconventional resource opportunities, Houston-based exploration and production independent ConocoPhillips said Wednesday it has entered into a set of agreements with PetroChina Co. Ltd., under which PetroChina will acquire an interest in two Western Australia exploration assets and establish a joint study agreement (JSA) for unconventional resource development in China's Sichuan Basin.
Upon government and partner approvals, PetroChina -- a state-owned company -- would acquire a 20% working interest in the Poseidon offshore discovery in the Browse Basin, and a 29% interest in the Goldwyer Shale in the onshore Canning Basin, both of which are in Western Australia.
Under the JSA, ConocoPhillips and PetroChina plan to study the potential for unconventional resource development in the approximately 500,000 acre Neijiang-Dazu Shale block in the Sichuan Basin. The joint study would evaluate the potential for unconventional resource exploration in the area. If technically and commercially viable, the companies plan to advance development under a production sharing contract, which would be agreed upon during the study period.
"We welcome PetroChina as a new joint venture participant in our Australian offshore and onshore exploration projects," said Todd Creeger, president, ConocoPhillips Australia-West. "We look forward to jointly delivering two successful assets."
Jim Taylor, president of ConocoPhillips China, said the deal with PetroChina provides a "great opportunity" to study the potential for unconventional resource development in China. "We believe that the cooperation between the two companies will form an important driver in promoting clean energy supply to China and contributing to the country's transition into a clean energy economy."
ConocoPhillips has been eyeing China for unconventional resource opportunities for some time now. In December the company entered into an agreement with China Petrochemical Corp., a state-owned company also known as Sinopec Group, to perform a study of unconventional oil and natural gas resources in the Sichuan Basin (see Shale Daily, Dec. 27, 2012).
China's shale reserves are estimated to be the world's largest. In April 2011, an initial assessment of world shale gas resources conducted by the U.S. Energy Information Agency reported that China holds 1,275 Tcf of technically recoverable shale gas resources (see Shale Daily, April 7, 2011). That figure represents about 19.3% of the world's total (6,622 Tcf) and is well above reserves in the United States, which were estimated at 862 Tcf.