"We believe that the cooperation between the two companies will form an important driver in promoting clean energy supply to China and contributing to the country's transition into a clean energy economy," Jim Taylor, president of Conoco's subsidiary in China, said in a statement.
Conoco and PetroChina, under the terms of a study agreement, announced plans to explore the shale natural gas potential in the 500,000-acre Neijiang-Dazu block in the Sichuan basin.
The companies said they would advance development of the area under a production-sharing contract if they found technically and commercially viable natural gas reserves in the block.
Analysis from Bloomberg News this week states that China aims to get 2.8 trillion cubic feet of natural gas from shale by 2020. With no commercial quantities of shale gas produced as of 2013, Bloomberg states production by 2020 may be far short of Beijing's expectations.
PetroChina, in turn, acquires an interest in Western Australian assets, which it said was an important move that may ensure access to more liquefied natural gas and unconventional oil deposits.