Beijing's shale gas targets 'unrealistic' say experts
Experts say that price controls put off experienced operators who risk losing money
The mainland, consuming energy at the fastest pace among major economies, has set ambitious targets to exploit its reservoirs of shale gas.
However, experts say, Beijing will fail to meet those targets.
The mainland produces no commercial quantities of shale gas, yet it has set a target of 80 billion cubic metres (bcm) by 2020, or 23 per cent of total expected demand. Output in 2020 is likely to be 18 bcm, the average estimate of seven analysts surveyed by Bloomberg. That is more pessimistic than a year ago, when the forecast was 23 bcm.
Chris Faulkner, chief executive of the Texas-based shale driller Breitling Oil and Gas, which is in talks in China, said: "China's production targets are not realistic. The only way China is going to be able to meet its output goals is for the government to pour money into exploration and development and ease up on the price controls."
The only way China is going to be able to meet its output goals is for the government to pour money into exploration and development and ease up on the price controls
By dictating fuel prices in a centrally controlled economy, Beijing has discouraged investment in shale, because drillers risk losing money. China National Petroleum Corp and China Petrochemical Corp, the two largest gas producers, won no exploration blocks in the last auction, while companies with no gas-drilling experience did.