China's Shale Gas and Shale Oil Resources: Opportunities and Challenges

Abstract

China is in a unique period of strategic opportunity for shale oil and gas development now. There are many favorable factors such as expanding domestic natural gas market, rich resources, stimulus from the government as well as experiences and advanced technologies imported from America. State-owned large oil companies, such as SINOPEC and PetroChina as well as Yanchang Petroleum (a provincial government company), lead shale gas exploration in China. Local state-owned and private companies are also active players. Breakthroughs have been made in development of shale resources, especially shale gas. By the end of the “Twelfth Five-Year Plan”, Jiaoshiba pilot project will become the first large shale gas field of China with an annual production capacity of about 5 bcm and annual shale gas output of 3.2 bcm. However, there are also big challenges facing shale resource development in China, such as complex geological conditions, technical bottlenecks and poor infrastructure. These difficulties can be overcome through strengthening resource assessment, technical innovation and international cooperation.