Royal Dutch Shell and the China National Petroleum Corp (CNPC) have signed a deal to boost cooperation in sectors like deep sea exploration as well as liquefied natural gas (LNG) and unconventional gas sources like shale, CNPC said on Wednesday.
The two companies had agreed to join forces in the development of both upstream and downstream energy businesses, CNPC said on its website. Ben van Beurden, in his first overseas visit since becoming Shell’s chief executive, told CNPC Chairman Zhou Jiping that both sides have set up deep and wide-ranging ties and have huge room for further cooperation.
The Anglo-Dutch firm is already one of the biggest overseas investors in China’s energy sector, and it could be well-placed to take advantage of Beijing’s plans to grant foreign enterprises more market access. It is already partnering up with CNPC, the country’s top energy group and parent of PetroChina, to explore and develop shale gas in China’s western regions.
Shell hopes to benefit from the operational and technological experience gained during the development of shale gas in North America, while CNPC holds the country’s premium oil and gas acreage. Shell also plans to partner CNPC to build a $12.6 billion refinery and petrochemical complex in eastern China, a project that could become the single largest foreign investment in the country. It is also major supplier of LNG to China, securing gas from its global gasfields in Australia, Qatar and elsewhere.