Royal Dutch Shell and China National Petroleum Corporation to Partner on Gas Project

Earlier this month, Royal Dutch Shell, headquartered in London, and a China energy firm announced a deal involving a business relationship in Australia. Last week Royal Dutch Shell and the China National Petroleum Corporation (CNPC) announced plans to develop a similar project in China. The aim of the deal announced last week is to partner in the development of gas located in Sichuan province.

According to Shell:

"The companies have submitted a production sharing contract to the Chinese central government for approval. Under the 30-year contract, Shell and CNPC would appraise and potentially develop tight gas (basin-centred gas) reservoirs in an area of approximately 4,000 square kilometres in the Jinqiu block of central Sichuan Province."

Click here to see a map of the specific location in China.

Malcolm Brinded, executive director of upstream international at Shell, said, "The agreement will strengthen our partnership with CNPC in developing cleaner energy to meet China's growing needs."

In reporting on the announcement, the Financial Times ("Shell Joins CNPC for Project," March 23, 2010) put the deal into greater context: "All of the world's largest energy companies are seeking partnerships with China's state-owned petrochemical groups, particularly in Africa, Latin America, and the Middle East where China is viewed more favourably than in some western countries."

In short, "the beat goes on"...western energy giants, particularly in Europe, are looking for ways to partner with China-based firms.

BP-China National Petroleum Company Win Iraq's First Oil Auction

Last week a partnership involving BP and the China National Petroleum Company won the right from the Iraqi government to extract oil from the Rumaila oil field.

All other major oil companies -- including ConocoPhillips and Exxon Mobil -- did not complete the bidding process. The next auction will be held by the Iraqi government later this year.

A story in The Los Angeles Times ("Iraq awards BP-led consortium a contract to develop oil field," July 1, 2009) suggested that the auction was not the major success the government had hoped for:

"The disappointing outcome to the widely anticipated event, which was planned a year ago, suggested that international oil firms aren't as eager to invest in Iraq as the government had hoped and that there will be no quick fix for the nation's looming financial problems."

An interactive overview of what Iraqi oil field are available can be accessed by clicking here.