Bloomberg News

Shell Signs Deals With Cnooc, China National for Access

July 25, 2012

Royal Dutch Shell Plc (RDSA), Europe’s biggest oil company, expanded cooperation with two of China’s state-backed producers, giving it more access to reserves in the world’s second-largest economy.

The London-based company signed two offshore production- sharing contracts with Cnooc Ltd. (883) for the Yinggehai basin and amended a production sharing agreement with China National Petroleum Corp. to allow the development of tight gas reserves, Shell said in a statement yesterday. It also agreed to explore blocks off Gabon with Cnooc.

“These new projects in partnership with Chinese companies are the latest showcase of our China strategy to work with our Chinese counterparts both in China and globally to help meet the country’s energy needs,” Lim Haw-Kuang, head of Shell in China, said in a statement.

In the offshore Yinggehai blocks, Shell will conduct seismic surveys and hold a 100 percent working interest in the exploration phase that will be reduced to 49 percent if there is a development, it said. In Gabon, Cnooc acquired a 25 percent interest in two exploration blocks and will reimburse Shell for some past costs.

Shell signed China’s first shale gas production sharing contract in March as China tries to unlock resources similar to those that sparked the U.S. natural gas boom. China may have 50 percent more shale gas reserves than the U.S., according to the U.S. Energy Information Administration.

To contact the reporter on this story: Brian Swint in London at bswint@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net


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