Jan 22, 2013 05:27 PM

16 Companies Win Bids to Prospect for Shale Gas


(Beijing) – Sixteen companies won the right to prospect 19 shale gas blocks in a second round of bidding, the Ministry of Land and Resources said on January 21.

Fourteen of the firms are state-owned and two are private.

The companies are to invest a combined 12.8 billion yuan to explore the shale gas blocks over a three-year period that starts this year, the companies' bid documents show.

The blocks are in Henan, Hubei, Hunan, Guizhou, Jiangxi and Zhejiang provinces and Chongqing.

A total of 91 bidders met the tender criteria and participated in the bidding last year, the ministry said. Fifty-two were state-owned companies, five were Sino-foreign joint ventures and 34 were private firms. They had either oil and gas exploration licenses or gas prospecting licenses.
The ministry will monitor the exploration progress and supervise companies as they prospect, Peng Qiming, director of the ministry's geological exploration department, said. Companies not performing the expected prospecting will be punished.

Companies' annual prospecting investment must be at least 30,000 yuan per square kilometer, bidding documents show.

The ministry said in September it was lowering the threshold for bidders in the sector. This was the first time that the government allowed both private companies and joint-venture firms to access upstream rights in the oil and gas industry.

Foreign firms were surprised they would be allowed to be junior partners in joint ventures. However, no joint venture won bids.

Only six companies were invited to the first round of bidding for shale gas blocks in Beijing in 2010.

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