BP signs second Chinese shale gas contract with CNPC

BP has signed a second production sharing contract (PSC) for shale gas exploration, development and production with China National Petroleum Corporation (CNPC).

The contract, which was signed on 27 July, covers approximately 1,000 square kilometres at Rong Chang Bei in the Sichuan basin. The first contract BP had signed with CNPC in March was for the adjoining Neijiang-Dazu block.

Chief executive Bob Dudley said: “We are pleased to be making further progress in our strategic partnership with CNPC and deepening our business in China.

“Combining CNPC’s operational expertise with BP’s technology and experience, we now expect to leverage the synergies between these blocks. This new PSC clearly demonstrates our continued commitment to invest in projects in China which will deliver long-term value to BP, to our Chinese partners and, most importantly, to the country.”

BP said the PSC marks another achievement under its and CNPC’s framework agreement on strategic cooperation that was signed in October 2015 during the President of The People’s Republic of China’s visit to the UK.

The oil giant’s China president, Edward Yang, said: “China is important for global energy markets and for all BP’s businesses. With this new PSC sealed, we want to further expand our presence in this vital market.”

At 0943 BST, BP shares were down 0.6% to 425.55p.