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Chinese Oil Giant Calls for Government Support of Shale Projects

China’s government should do more to back shale oil projects in the country through preferential tax treatment for the sector, one of the biggest state-owned oil and gas giants says.  

The authorities need to roll out financial support policies and preferential taxes for the shale industry in China, Ma Yongsheng, chairman of China Petroleum & Chemical Corporation, or Sinopec, said on Wednesday, as quoted by Reuters.

China has a lot of shale oil reserves, but their extraction is more complex than in the U.S. due to geology constraints, according to Ma.

The Chinese government should also boost financial support to research and development for drilling and extraction of the shale resources, Sinopec’s executive said.

Early this year, Sinopec, said it had found oil and gas at a shale exploration well in the Sichuan province in the southwest, estimating that the initial flows could lead to the discovery of around 100 million metric tons of hydrocarbons. 

The Sichuan province in southwestern China is estimated to hold a large part of China’s shale gas resources. 

Chinese state oil and gas giants have stepped up exploration efforts in China in recent years, in line with a government policy to boost reserves and production to help reduce dependence on imports.

While Chinese majors increase exploration in the shale basins and in conventional locations, the much deeper location of the shale oil and gas reserves in China makes extraction more challenging than in the U.S., for example. 


Although China is estimated to have a high volume of shale gas resources, topping even those in the United States, its shale gas boom has not yet materialized. Unlike in the U.S., the development of shale gas resources in China is much more difficult due to more complex geography and a lack of adequate infrastructure in the remote mountainous regions where most of the Chinese shale resources lie. 

By Tsvetana Paraskova for Oilprice.com

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