Shenhua Group Corp., China's biggest coal producer, and China Huadian Corp. were among winners in a second round of an auction to explore 19 shale gas blocks.

China Petroleum & Chemical Corp., Asia's biggest refiner, and China National Offshore Oil Corp., the country's biggest offshore energy producer, failed to win blocks, according to a statement posted on the website of the Ministry of Land and Resources Thursday.

China holds the world's biggest shale reserves even as output in the U.S. quadrupled in the four years to 2010. The Asian country holds 25.08 trillion cubic meters of exploitable reserves of the fuel, according to the land and resources ministry. It aims to produce 6.5 billion cubic meters (230.37 billion cubic feet) of shale gas annually by 2015 and 60 to 100 billion cubic meters by the end of the decade, the National Development and Reform Commission said in March.

To help meet that goal, China's land ministry offered 20 blocks in the auction, compared with six in 2011. Bids for this round were submitted on Oct. 25 and 19 blocks received more than three bids, the minimum required for the auction to proceed, it said. China National Petroleum Corp., the country's biggest oil and gas producer, China Petroleum and China National Offshore all submitted bidding materials on Oct. 25.

'Big Oil'

"It's obvious the big three oil companies have not tried hard enough to win blocks in the auction," said Shi Yan, a Shanghai-based energy analyst at UOB-Kay Hian Ltd. "Their absence should have no impact to the development China's shale gas industry, as it has been seen everywhere that non- traditional oil and gas players are leading the campaign in tapping shale gas resources."

China Petroleum and China National Offshore have both acquired shale gas blocks before this auction. China Petroleum Chairman Fu Chengyu said in March the company planned to produce at least 2 billion cubic meters of unconventional oil and gas by 2015.

China Huadian, a power generator, was the biggest winner with three blocks. Its unit Huadian Hubei Power Generation Co. won two blocks in Hubei province and Huadian Coal Industry Group Co. won a deposit in Guizhou province. China Corporation of Coal Geology Engineering Corp., a coal exploration company, won two areas in Guizhou and Hunan.

Eight Provinces

Henan Yukuang Resources Exploitation Co., an energy exploration company owned by the Hunan government, won two blocks in the province, according to the statement. Chongqing Energy Investment Group, owned by the Chongqing government, won the right to explore a shale gas area in the municipality, according to the statement.

The areas offered in the auction cover 20,002 square kilometers (7,723 square miles) across eight provinces in China. Qualified bidders were required to have at least 300 million yuan ($48 million) of capital and hold licenses for mining. Foreign companies were allowed to form joint ventures with auction winners to tap the fuel in China.

China's natural-gas consumption will increase fourfold by 2030 to 600 billion cubic meters a year, accounting for 30 percent of global growth in gas demand, Wood Mackenzie Ltd. said June 6. The nation's "ambitious" target for 2020 may be delayed by the need for better understanding of its shale formations and insufficient technical know-how, supply-chain services and infrastructure, according to the Edinburgh, Scotland-based consultant.

China Petroleum and Henan Provincial Coal Seam Gas Development and Utilization Co. won exploration rights in the nation's first shale gas auction in June 2011.

The U.S. has an estimated 482 trillion cubic feet (13.6 trillion cubic meters) of technically recoverable shale gas, according to the U.S. Energy Information Administration's website.

The winning bidders include:

Huadian Coal Industry Group Co. China Corporation of Coal Geology Engineering Corp. Wintime Energy Co. Tongren Energy Investment Co. Chongqing Energy Investment Group Chongqing Minerals Development Investment Co. State Development & Investment Corp. China Rising Energy Investment Co. Shenhua Geological Exploration Co. China Huadian Engineering Co. China Corporation of Coal Geology Engineering Corp. Hunan Provincial Shale Gas Development Co. Hunan Shale Gas Development Co. Huadian Hubei Power Generation Co. Anhui Province Energy Group Co. Henan Yukuang Resources Exploitation Co.