China Shenhua Energy Wins Shale Block

China Shenhua Energy said on Friday that it has won the auction of a shale gas block in southern China as part of its efforts to further integrate its energy business, a news report by Reuters said.

Shenhua Geological Exploration Company, a wholly owned unit of Shenhua Energy, has won the tender for the 1,189-square-kilometre Baojing Shale Gas Block in Hunan province via an auction held by the Chinese government last year, Reuters added citing a filing with the Hong Kong bourse.

The move was part of the state-owned giant's strategy to "broaden its presence in the energy market and optimise its business model as an integrated energy company," said Shenhua Energy, which also owns power plants and railways and ports.

Shenhua said it will invest 874 million yuan ($140.42 million) in the exploration of the shale gas block over three years, but it also cautioned against investment risks, the news report by Reuters further said..

"The shale gas exploration and development is in the preliminary stage in China. There are uncertainties in the exploration achievements of and the development prospects for shale gas resources in the Baojing Block," it said.