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Shell buys 90% stake in Sichuan gas project
By Richard Fu |
December 20, 2012, Thursday
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Online Edition
Online Edition
ANGLO-DUTCH petroleum company Shell said it has acquired a majority stake in a Chinese natural gas project in southwestern Sichuan Province from Canada's Ivanhoe Energy Inc.
Shell now has a 90 percent participating interest in the Zitong tight gas block during the exploration and development phases while Japan's Mitsubishi Gas Chemical owns the rest. Shell becomes the operator.
The deal has been approved by the Chinese government, Shell said in a statement yesterday. It didn't reveal the deal value, but Ivanhoe said in January it would sell the stake to Shell for about US$160 million to focus on oil exploration projects.
Ivanhoe signed an agreement with China National Petroleum Corp in 2001 to help develop its Zitong unconventional gas project, an area of 1,001 square kilometers which lies 20 kilometers to the north of the Jinqiu block in the Sichuan basin. The 30-year Zitong production sharing contract expires in 2032.
Ivanhoe initially owned 100 percent of the Zitong project before selling a 10 percent stake to Mitsubishi Gas Chemical.
Shell has vowed heavy investment in China's upstream businesses to tap the country's surging natural gas demand.
Lim Haw Kuang, the outgoing executive chairman of Shell China, said: "We are very happy about this new development with our cooperation with CNPC on the gas front. This is another good step forward for our gas development business in China and we look forward to continued success in operating gas development projects in China."
Lim will retire at the end of this month.
Shell now has a 90 percent participating interest in the Zitong tight gas block during the exploration and development phases while Japan's Mitsubishi Gas Chemical owns the rest. Shell becomes the operator.
The deal has been approved by the Chinese government, Shell said in a statement yesterday. It didn't reveal the deal value, but Ivanhoe said in January it would sell the stake to Shell for about US$160 million to focus on oil exploration projects.
Ivanhoe signed an agreement with China National Petroleum Corp in 2001 to help develop its Zitong unconventional gas project, an area of 1,001 square kilometers which lies 20 kilometers to the north of the Jinqiu block in the Sichuan basin. The 30-year Zitong production sharing contract expires in 2032.
Ivanhoe initially owned 100 percent of the Zitong project before selling a 10 percent stake to Mitsubishi Gas Chemical.
Shell has vowed heavy investment in China's upstream businesses to tap the country's surging natural gas demand.
Lim Haw Kuang, the outgoing executive chairman of Shell China, said: "We are very happy about this new development with our cooperation with CNPC on the gas front. This is another good step forward for our gas development business in China and we look forward to continued success in operating gas development projects in China."
Lim will retire at the end of this month.
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