Ministry of Land and Resources holds a signing ceremony for winners of the first shale gas...

Ministry of Land and Resources holds a signing ceremony for winners of the first shale gas prospecting right assignment bidding project in Beijing
Source: Portal Website of Ministry of Land and Resources   Citation: Portal Website of Ministry of Land and Resources   Date: July 18, 2011

The first shale gas prospecting right assignment bidding pilot held by China was successfully completed. China Petroleum & Chemical Corporation and Henan Provincial Coal Seam Gas Development and Utilization Co., Ltd won the bid. On July 18, the Ministry of Land and Resources held a signing ceremony for the winners of the shale gas prospecting right assignment bidding project, and respectively signed the Shale Gas Prospecting Right Assignment Contract with the winning enterprises, and presented them Shale Gas Exploration License. Vice Minister of Land and Resources and Director-General of China Geological Survey Wang Min attended the signing ceremony. Besides, Chief Engineer of Ministry of Land and Resources Zhang Hongtao made an important speech which recognized the shale gas prospecting right bidding work and put forward new requirements for further introducing competition and improving oil gas resource management in the future.

　According to related rules stipulated in laws and regulations as well as the tender documents, the Ministry of Land and Resources selected experts from the expert pool in a random manner by applying a computer-generated selection program to form a bid evaluation expert group under the principles of legality, equity and fairness. In line with the bid-evaluation method and criteria stipulated in the tender documents, the bid evaluation expert group carried out evaluation and marking on the eligible bid documents for Chongqing and Guizhou Nanchuan shale gas prospecting area and Chongqing and Guizhou Xiangxiu Mountain shale gas prospecting area and ranked them from high to low according to the total marks. Chongqing and Guizhou Nanchuan shale gas prospecting area for which China Petroleum & Chemical Corporation won the bid covers an area of 2,197.9 square kilometers. China Petroleum & Chemical Corporation promised to invest a total of RMB 590 million in the prospecting, which was eight times the amount stipulated by laws and regulations for investment in prospecting, and accomplish 11 parameter wells and preliminary prospecting wells during three years of prospecting. Chongqing and Guizhou Xiangxiu Mountain shale gas prospecting area for which Henan Provincial Coal Seam Gas Development and Utilization Co., Ltd won the bid covers an area of 2,038.87 square kilometers. The company promised to invest a total of RMB 240 million in the prospecting, which was four times the amount stipulated by laws and regulations for investment in prospecting, and accomplish 10 parameter wells and preliminary prospecting wells. The Ministry of Land and Resources adopted contract administration for the shale gas prospecting right assigned through the bidding, and signed the contract on shale gas prospecting right assignment with the winning enterprises to enhance supervision on shale gas prospecting activities of the enterprises. The shale gas prospecting right assignment bidding was an important milestone in China’s oil gas resource field, and also an innovative attempt to reform oil gas resource administration system. It is of great significance for the construction of a scientific, reasonable, open, just, efficient and incorrupt new mechanism on oil gas resource administration, facilitation of shale gas prospecting and exploitation, acceleration of China’s shale gas industrialization and scale development and improvement of China’s oil gas resource guarantee capability.

In recent years, the Ministry of Land and Resources has adopted several measures to actively push forward the shale gas prospecting and exploitation. On one hand, it intensified strategic survey on shale gas resources. In 2004, it began to carry out tracking study on China’s shale gas resources. In 2009, it implemented strategic survey on shale gas resources in the regions of Sichuan, Chongqing and Guizhou, and classified China’s shale gas resources into three major categories with 33 shale gas resource prospective areas. In 2010, it carried out early stage research and study on shale gas resources in Sichuan, Chongqing, Guizhou, Hubei, Jiangsu, Zhejiang, Anhui as well as part of North China, Northeast China and Northwest China, and basically learned about major target zones of shale gas occurrence as well as geological characteristics and distribution of shale gas and basic parameters for shale gas resource appraisal, preliminarily set up methods for shale gas resource appraisal, criteria for prospective area selection and techniques for survey and appraisal, and selected a group of shale gas resource prospective areas for further commercial prospecting by enterprises. In 2011, it zoned China’s shale gas resources into five major regions: upper reaches of the Yangtze River and Yunnan, Guizhou and Guangxi; middle reaches of the Yangtze River and Southeast China; North China and Northeast China; Northwest China; Qinghai and Tibet, to carry out a nation-wide survey and appraisal on shale gas resources. On the other hand, it encouraged and supported enterprises to explore prospecting and exploitation of shale gas. In 2009, it set up five shale gas prospecting rights to support petroleum enterprises in implementing prospecting and exploitation tests and encourage them to carry out re-survey and prospecting on old wells in the registered oil gas prospecting right areas. Enterprises like PetroChina, Sinopec, CNOOC, Yanchang Petroleum and CUCBM were all taking positive actions. So far, there are 15 vertical shale gas wells which have gone through fracturing gas test with 9 of them producing gas, demonstrating the prospect of China’s shale gas exploitation. The Ministry of Land and Resources currently is organizing formulation of Twelfth Five-year Plan on Shale Gas Development jointly with National Energy Bureau to make a comprehensive plan on China’s shale gas prospecting and exploitation in accordance with requirements of the Party Central Committee and the State Council. Meanwhile, it will improve the system on shale gas resource management, define legal status of new types of shale gas, complete the system on shale gas prospecting right bidding assignment and gradually introduce more enterprises which are financially strong, qualified for prospecting, truthful and faithful to enter the field of shale gas prospecting and exploitation in order to facilitate rapid development of shale gas industrialization and enlarge its scale. (By Yu Hongqi)