State firms seek tech help to tap China shale gas
Mainland SOEs are forming partnerships to gain fracturing expertise in a bid to access vast energy resources trapped in rock formations
State-backed oil and gas firms are increasingly looking to tap the expertise of technology companies - mainly in the private sector - to enhance their technical capabilities, operating efficiency and profitability.
China Petroleum & Chemical Corp (Sinopec), the mainland's second-largest oil and gas firm, has taken the lead in the trend, forming partnerships with foreign firms which have technology that could help it tap the mainland's vast shale gas resources. It is also looking at potential cooperative ties with internet firms that could open up revenue streams for its vast petrol station network.
PetroChina, the mainland's largest oil and gas producer, has taken a less direct approach, tapping into domestic suppliers which have partnerships with foreign firms with advanced drilling technology, or entering into joint ventures with foreign oil and gas firms that already work with suppliers with such technology.
Beijing has tasked both with enhancing national energy security by lifting domestic output of hard-to-extract unconventional oil and gas, with the help of advanced foreign technology.
They have also been asked to co-invest with private domestic and foreign firms as part of Beijing's state-owned enterprise reform push to make them more efficient and better governed.
President Xi Jinping told a central government energy policy meeting in June that the mainland should "follow closely the trend of international energy technological revolution".
The US has led the world in shale oil and gas production by deploying advanced technology, and is projected by the International Energy Agency to surpass Saudi Arabia and Russia as the world's biggest oil producer by next year and become energy self-sufficient in two decades.