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CHINA has mounted a huge investment drive to explore its vast untapped reserves of shale gas in what it hopes could become a repeat of the energy revolution taking place in North America.
Sixteen Chinese companies, 14 of them state-owned, have pledged to invest 12.8 billion yuan ($2bn) when they won contracts from the Ministry of Land and Resources to search for shale gas in remote parts of the country over three years, according to Xinhua, the state news agency.
The Chinese companies are among 57 businesses awarded rights to explore 19 shale gas blocks in a second round of auctions.
Beijing, keen to secure its future energy supplies, is investing billions of dollars in buying oil and gas assets overseas as well as ploughing funds into its domestic industry.
China is thought to hold the world's largest reserves of shale gas, according to the US Energy Information Administration, far outstripping those of North America and potentially enough to meet its energy needs for two centuries.
However, its industry is only at an embryonic stage, with about 60 wells compared with more than 8000 in the US.
Shale gas, which is trapped in rocks, is complex to extract, requiring a sophisticated process of horizontal drilling known as hydraulic fracturing, or "fracking", to unlock it.
Experts said the contracts, mostly given to smaller, inexperienced companies, could provide opportunities for international oil groups to lend their expertise. Julian Lee, a senior analyst at the Centre for Global Energy Studies in London, said the Chinese companies awarded contracts would be looking to bring in oil majors with experience of shale drilling.
Along with the rapid development of China's energy industry, China Oil & Gas Pipeline network is experiencing unprecedented great structure, large-scale construction and giant leap. Read More >
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