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Shell China Acquires 55% Interest in Coalbed Methane Venture

Posted on: Friday, 28 December 2007, 06:00 CST

Shell China Exploration and Production has acquired a 55% equity interest in a coalbed methane venture in Shanxi Province, China. Shell will take over the venture as operator.

The company said that the Chinese government has approved an agreement for Shell to acquire a majority equity position in Verona Development Corporation under a 30-year production sharing contract (PSC) covering the north Shilou block, a 1,015sq km area in the eastern part of the Ordos Basin in China.

Verona will maintain a 5% interest in the venture with China United Coalbed Methane Company (CUCBM) holding the remaining 40% equity. The exploration period of the PSC will end in December 2010. Following this the PSC stipulates five years of development and a 20-year production period.

Lim Haw-Kuang, executive chairman of Shell companies in China, said: "The north Shilou PSC is another important step for the Shell Group in developing a significant and long-term business in China and globally. We are very excited about this project and look forward to working with our joint venture partners Verona and China United Coalbed Methane Company.

"We are confident that our upstream technologies and expertise can help unlock the vast potential of CBM in the country."

Source: Datamonitor

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