BP and China National Petroleum Corporation (CNPC) signed a production sharing contract (PSC) for shale gas exploration, development and production in the Neijiang-Dazu block in the Sichuan Basin, China. Witnessed by BP Group Chief Executive Bob Dudley and CNPC Chairman Wang Yilin, the contract is BP’s first shale gas PSC in China and covers an area of approximately 1,500 square kilometres. CNPC will be operator for this project.

“We are pleased to reach this significant milestone as part of our strategic partnership with CNPC, building on our successful cooperation in and outside of China,” Dudley said. “We are looking forward to working together with CNPC on technology, operational and subsurface techniques in unconventional resources. We will bring our worldwide experience to our first unconventional gas project in onshore China with CNPC. We will combine this with CNPC’s knowledge and experience to bring gas to China’s growing clean energy market. China continues to be an important part of BP’s portfolio.”

This PSC is the first achievement from BP and CNPC’s framework agreement on strategic cooperation that was signed last October during the visit to the UK of President of The People’s Republic of China, Mr. Xi Jinping. In addition to unconventional resources, the framework agreement covers possible future fuel retailing ventures in China, exploration of oil and LNG trading opportunities globally, and carbon emissions trading as well as sharing of knowledge around low carbon energy and management practices.

CNPC Chairman Wang commented: “CNPC and BP's existing cooperation covers various areas including retail business in China, overseas upstream exploration and development and international trading. Building upon the framework agreement on strategic cooperation signed last year, this unconventional resource PSC is a manifestation of our deepening cooperation. By leveraging the parties' complementary advantages, CNPC and BP will jointly realize the efficient development of unconventional resources.”

BP’s Energy Outlook (2016 edition) expects that by 2035 shale gas will account for a quarter of the total gas produced globally and China will become the world’s largest contributor to growth in shale gas production.

“As a new strategic industry for China, the exploration, development and production of shale gas will significantly benefit China’s energy mix in a long run,” said Edward Yang, BP China President. “Through this PSC, BP once again clearly reaffirms our commitment to being one of China’s preferred energy partners to support the country in developing cleaner energy for a greener future.”

About BP in China

BP is one of the leading foreign investors in the Chinese oil and gas sector. BP’s business activities in China include exploration and development, petrochemicals manufacturing and marketing, aviation fuel supply, oil products retailing, lubricants, oil and gas supply and trading, LNG terminal and trunk line and the chemicals technology licensing. Building on its business successes in China, BP has also expanded partnerships with the national energy companies beyond the country’s borders.

About BP

BP (NYSE:BP) is one of the world's largest oil and gas companies, serving millions of customers every day in more than 80 countries, and employing nearly 85,000 people. BP's business segments are oil and gas exploration & production, and refining & marketing. In alternative energies, BP has low- and no-carbon wind and biofuels businesses. Through these activities, BP provides fuel for transportation; energy for heat and light; services for motorists; and petrochemicals products for plastics, textiles and food packaging. It has strong positions in many of the world's hydrocarbons basins and strong market positions in key economies.

About CNPC

CNPC is China's largest oil and gas producer and supplier, as well as one of the world's major oilfield service providers and a globally reputed contractor in engineering construction. With a presence in almost 70 countries, we are seeking an even greater international role. We provide energy in a profitable manner, and always attach great importance to our social and environmental responsibilities.​