PetroChina buys Shell shale gas assets
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By Leslie Hook in Beijing and Paul J Davies in Hong Kong
PetroChina is extending its reach into Canadian shale gas assets with a fresh deal with Royal Dutch Shell, estimated to be worth more than $1bn, underlining China's strategic interest in Canadian resources just days before Canada's prime minister Stephen Harper arrives in Beijing.
Chinese companies have poured billions of dollars into Canadian energy assets in the last two years as they seek to expand overseas production and gain expertise in extracting unconventional fossil fuels, including from oil sands and shale gas. China's resources investments and imports of Canadian oil and gas are expected to be high on the agenda when Mr Harper arrives in China on February 7.
The new deal will see PetroChina buy a 20 per cent stake in Shell's Groundbirch assets, which include shale gas acreage in northeast British Columbia, a province on Canada's west coast.
Unconventional gas, including shale gas and coal bed methane, has been a major focus for China's oil majors as they seek to develop the expertise to tap into China's own reserves of the gas, estimated to be the largest in the world.
"PetroChina hopes to gain experience in management and production in the exploration and development of unconventional natural gas through its co-operation with Shell," said Mao Zefeng, PetroChina's senior assistant secretary to the board.
He declined to comment on the value of the deal, which a person close to the transaction said was worth more than $1bn.
The deal is also a welcome victory for PetroChina in Canada after the failure last year of its tie-up with Encana, a Canadian energy company specialising in shale gas. The Encana deal, worth $5.4bn, was announced last February but collapsed four months later as the two sides failed to agree on details.