OREANDA-NEWS. January 20, 2015. Brought into being in Chongqing on December 2, 2014, was Chongqing Shale Gas Exploration & Production LLC (hereinafter referred to as the Chongqing Company), a joint venture established by Sinochem Petroleum Exploration and Production Co., Ltd., a subsidiary of Sinochem Group; PetroChina Company Limited, a subsidiary of China National Petroleum Corporation; SDIC Chongqing Shale Gas Development & Utilization Co., Ltd; and Chongqing Institute of Geology and Mineral Resources.

Huang Qifan, Deputy Party Secretary and Mayor of Chongqing Municipality; Cai Xiyou, President of Sinochem Group; Wang Huisheng, Chairman of the State Development & Investment Corporation; and Zhao Zhengzhang, Vice General Manager of China National Petroleum Corporation jointly unveiled the new company. Afterwards, Sun Zhengcai, Party Secretary of Chongqing Municipality, met with representatives from the shareholders in the Chongqing Company, including President Cai Xiyou of Sinochem Group. On the same day, Chongqing Municipality signed a framework agreement with the Chongqing Company.
 
As President Cai Xiyou put it, not only is the establishment of the Chongqing Company a major landmark in China's history of oil and gas resources development, but it represents a major institutional innovation. At present, profound changes in the energy structure and the supply-and-demand relationship have made a lot of room for shale gas exploration and development business. The Chongqing Company will make sustained efforts to make exploration and development efforts at Chongqing's shale gas resources develop into an industry of considerable magnitude, thereby making contributions to China's national effort to safeguard its energy security and to the municipality's effort to develop its local economy.

The Chongqing Company has a registered capital of 6 billion yuan and China National Petroleum Corporation, the State Development & Investment Corporation, Sinochem Group, and Chongqing Institute of Geology and Mineral Resources hold a 40%, 39%, 20%, and 1% stake, respectively, in the joint venture. Its goal is to promote the development, production, and sale of shale gas resources in five potentially shale gas-rich blocks in Chongqing, including those located in Zhong County and in Fengdu County, as a whole, to make Chongqing a bridgehead in the broad effort to explore for and develop shale gas resources, achieve comprehensive utilization of shale gas, and manufacture shale gas-related equipment, and to speed up the building of a national shale gas development demonstration zone and an important new energy development & utilization base. Any shale gas block acquired by China National Petroleum Corporation in Chongqing later will also be incorporated into the scope of cooperation defined for the Chongqing Company.

This strategic alliance formed between some state-owned companies operating directly under the Central Government and those operating under a local government will be conducive to the integration of the advantages of each investor in terms of resources, funds, technology, and management, and, by extension, to the realization of a win-win situation where all parties concerned will complement and cooperate closely with each other to speed up the municipality's effort to explore for and develop its shale gas resources.