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GE in shale talks with Chinese oil and gas majors

16th November 2012

GE Oil & Gas eyes China’s top energy firms to spur more economic and efficient shale gas development

GE in shale talks with Chinese oil and gas majors
Beijing hopes to produce 6.5 billion cubic meters of shale gas by 2015 and as much as 100 billion by the end of the decade

The oil and gas technology arm of an American company is mulling over the possibility of teaming up with China’s top three energy firms, China Daily reported on Wednesday, as part of plans to spur a more economic and efficient development of unconventional oil and gas in the country.

Subsidiary of General Electric Co., GE Oil & Gas is considering a potential cooperation with China National Petroleum Corporation (CNPC), China Petrochemical Corporation (Sinopec), and China National Offshore Oil Corporation (CNOOC) to encourage the development of shale gas in the world’s top energy consumer.

The oil and gas technology firm is looking for better, more economic ways of recycling waste water, increasing drilling efficiency, and reducing the amount of water needed for exploration.

Liu Bo, general manager of GE Oil & Gas Greater China, said the global technology and solutions provider is working on a market evaluation of the sector, which should take around 2 to 3 months to complete.

"The company will then decide on its position and direction, but it is too early to project anything more at present," China Daily quoted Liu Bo as saying.

The company established an innovation centre in Chengdu, Sichuan province, in June, with shale gas research and development now considered a key priority at the site, said Liu.

Beijing recently announced benefits to encourage unconventional oil and gas exploration in the country. hopes to produce 6.5 billion cubic meters of shale gas by 2015 and as much as 100 billion by the end of the decade. The country's second shale gas licensing round this year of 20 blocks elicited substantial interest from more than 100 domestic companies, including Sinopec and PetroChina.

China may hold the world’s largest accessible shale gas reserves, accounting for approximately 20 per cent of total resources, or 36 trillion cubic meters of minable shale reserves – enough to meet its gas consumption for the next 200 years, according to Moody’s.

The country’s technological challenges are unique – experts say China's reserves are buried deeper than US shale gas, the majority clustered in mountainous and arid regions which present more complex geological challenges.

 

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