China's biggest offshore energy producer has begun its first onshore domestic gas exploration project.
China National Offshore Oil Corporation (CNOOC) has started oil exploration in China's eastern Anhui province, as it joins Sinopec in the race to find unconventional natural gas. The project also marks the company's first onshore venture, according to a statement on their website.
Even though China has yet to produce the fuel commercially, Chinese energy moguls are clamouring for the nation's shale gas reserves, which are estimated to contain 1,275 trillion cubic feet of gas, or 12 times the country's conventional natural gas deposits, almost double the 862 trillion cubic feet held by the U.S.
“Although it may take more than five years for CNOOC to turn this exploration into real production”, says Neil Beveridge of Sanford C. Bernstein & Co, a Hong Kong based energy firm. According to Beveridge, the move shows the energy giant “will count heavily on unconventional oil and gas for growth down the road.” Developing domestic as well as international resources is critical for CNOOC, who have bid for around $16 billion of assets overseas since the beginning of 2010.