BEIJING, July 25 (UPI) -- A Chinese company said it signed a production sharing contract with U.S. energy company Hess Corp. for a shale oil block in Xinjiang, China.
China National Petroleum Corp. President Liao Yongyuan met this week in Beijing with Gregory Hill, the exploration and production chief at Hess, to sign China's first deal to develop shale oil reserves.
"The two sides exchanged views on furthering cooperation in the oil and gas sector and signed a cooperation agreement on Malang block of the Santanghu Basin in Xinjiang, China," CNPC said in a statement Wednesday.
China is considered rich in shale resources and the country aims to duplicate the success seen in the United States in terms of shale natural gas. Shale oil is in its preliminary stages in China and its shale reserves are considered more geologically complex to exploit than elsewhere in the world.
Hess this year said it was transforming its business focus from refining to exploration and production. The company said in February it set aside 40 percent of its exploration and production budget for 2013 for shale exploration in the United States.
Hess and CNPC agreed last year to conduct a preliminary study of the Malang block.