HONG KONG, July 25 (UPI) -- A move into the Chinese oil and natural gas sector will help address the country's long-term energy needs, a Shell official said Wednesday.
Shell announced Wednesday it signed two offshore oil and natural gas production sharing contracts with China National Offshore Oil Corp. and an amended onshore contract with China National Petroleum Corp.
Shell, under the terms of the deal with CNOOC, will serve as the operator of two blocks in the Yinggehai Basin. Shell's stake in the deal will be 100 percent during the exploration phase and will shift to 49 percent in any eventual development phase.
The deal with CNPC represents a "new phase" in so-called tight gas sands onshore China in the Changbei block. Shell said production there could reach 320 million cubic feet of natural gas per day.
"These new projects in partnership with Chinese companies are the latest showcase of our China strategy to work with our Chinese counterparts both in China and globally to help meet the country's energy needs to fuel its fast-growing economy," Lim Haw-kuang, executive chairman of Shell companies in China, said in a statement.
The International Energy Agency estimated Chinese oil imports could increase by 5 million barrels per day to 12 million bpd by 2035.
None of the companies involved in the deal disclosed the financial terms. CNOOC expressed its satisfaction with Shell's "rich experience in oil and gas operations."