China Opens Shale Gas Sector to Private Players

China will soon allow smaller private companies to join the bidding for shale gas mining rights as the country approved the gas as an independent mining resource.  

By the end of January, the government is expected to complete the preparation work for shale gas mining rights allocation and open the bidding in which qualified private companies can also participate, media reports said.  

It is the first time for China to allow private enterprises to join in the oil and gas exploration market.

As per Chinese law, exploration of oil and gas has to be approved by the State Council and requires a mining license.

Shale gas used to be included in natural gas category and only State-owned companies could obtain mining rights.

Shale gas drilling technology is only at the experimental stage in China, and mostly dominated by the three State-owned giants.

Foreign companies would not be able to participate in the tenders but could partner with the winning Chinese firms.