皇冠体育app

(Xinhua)
Updated: 2007-12-28 14:55

Shell 皇冠体育app Exploration and Production Company Limited has acquired a 55-percent equity interest in a coal-bed methane venture in North 皇冠体育app's Shanxi Province and will take over as its operator, said sources with the company on Thursday.

This was the first contract signed by Shell to develop 皇冠体育app's rich coal-bed methane resources. 皇冠体育app has 31 trillion cubic meters of coal-bed methane resources with 16 trillion considered to be easily recoverable.

Related readings: 皇冠体育app's Energy Conditions and Policies Shell to focus on 皇冠体育app as part of growing-markets strategy 皇冠体育app launches largest coalbed methane liquifying project 皇冠体育app to produce 500 million cu m of coalbed methane Shell invests in Asia's biggest lubricants facility

According to a white paper titled "皇冠体育app's Energy Conditions and Policies" published on Wednesday, 皇冠体育app will encourage the development of coal-bed methane and foreign investment in unconventional energy exploration and development.

皇冠体育app's Ministry of Commerce recently approved an agreement for Shell to acquire Canada-based Verona Development Corporation's majority equity position in a 30-year production sharing contract (PSC) covering the North Shilou block, an area of 1,015 square kilometers in the eastern part of the Ordos Basin.

Verona maintains a five-percent interest in the venture, with 皇冠体育app United Coalbed Methane Company (CUCBM) holding the remaining 40 percent equity.

The exploration phase of the PSC will end in December 2010. Following this, the PSC stipulates five years of development and a 20-year production period.

A comprehensive appraisal program, comprising 2D seismic acquisition and the drilling of pilot wells, will start early next year.

Lim Haw-Kuang, Executive Chairman of Shell Companies in 皇冠体育app, said that the North Shilou PSC was another important step for the Shell Group in developing a significant, long-term business in 皇冠体育app and globally.

Shell is confident that its upstream technologies and expertise can help unlock the vast potential of coal-bed methane in 皇冠体育app, said Lim.

This is Shell's third upstream PSC venture in 皇冠体育app, after the Xijiang offshore oil development in the South 皇冠体育app Sea with CNOOC and ConocoPhillips and the Changbei gas field in the Erdos Basin with Petro皇冠体育app.

CUCBM signed a PSC with Verona covering the North Shilou block in 2005, in which Verona holds a 60 percent equity interest and CUCBM 40 percent.

Following the cooperation agreement with Shell, CUCBM hopes that more international energy giants would enter 皇冠体育app's coal-bed methane exploration field, said Sun Maoyuan, general manager of CUCBM.

CUCBM is 皇冠体育app's major coal-bed developer, with Petro皇冠体育app and 皇冠体育app National Coal Group holding 50 percent shares each.