PetroChina, Conoco Team Up

PetroChina, the country's largest oil producer by output, said Thursday it has entered a series of agreements with US energy company ConocoPhillips to buy stake in Conoco's two gas projects in Australia, and the two companies will also start cooperation in shale gas exploration in China.

Under the agreements, PetroChina will acquire a 20-percent stake in Conoco's Poseidon project in the Browse Basin and a 29-percent stake in a shale gas project in the Canning Basin in Australia, PetroChina said in a press release posted on its website Thursday.

PetroChina declined to comment on financial details of the deal when contacted by the Global Times Thursday.

"Growth in domestic natural gas consumption has far exceeded domestic production - that is why China's energy giants have sped up acquiring overseas gas projects," Han Xiaoqing, an analyst at research agency ICIS C1 Energy, told the Global Times Thursday.

China consumed some 144.5 billion square meters of natural gas in 2012, while domestic production only amounted to some 106.7 billion square meters, according to Han, who noted that the dependency on imported natural gas may climb to around 50 percent by 2017.

PetroChina's deal with Conoco comes two months after the Chinese oil giant agreed to buy BHP Billiton's stake in a liquefied natural gas project in Australia at the price of $1.63 billion.

Media reports said Thursday that natural gas exploration in the Browse Basin area in Australia has met with opposition from some environmentalists and local aboriginals, which, according to analysts, has increased the risks for PetroChina increasing its investment in the area.

Under the deal with Conoco, PetroChina has also entered into a joint study agreement with the American energy company for unconventional gas development in the Sichuan Basin in China.

In December, Conoco entered similar agreements with Sinopec, another leading domestic energy company.

Meanwhile, China's State-owned Assets Supervision and Administration Commission said Thursday that China National Offshore Oil Corporation's $15.1 billion takeover of Canadian oil and gas company Nexen Inc was approved by the US government, the last hurdle for the company to finish the deal.

Other multinational energy companies, such as Royal Dutch Shell and Chevron Corp, have formed similar relations with China's leading energy companies.

"Cooperation with US energy companies, which own advanced technology in unconventional gas exploration, can help China further develop in the sector," Wang Ruiqi, also of ICIS C1 Energy, told the Global Times Thursday.

The Ministry of Land and Resources announced in December the results of a second round of public tender for shale gas exploration rights.

And two private companies nudged into the rank of winners.

"Exploration of unconventional gas, especially shale gas, is very likely to open up to foreign companies in the future, which is why they are making connections with Chinese companies at present," said Pu Deqin, a shale gas industry analyst at JYD Commodities Hub.