China to Allocate Funds for Shale Subsidy

China will allocate targeted funds from its central budget to subsidize shale gas exploration as part of its efforts to optimize the country's energy structure, Xinhua said in a report.

The government intends to provide a subsidy of 0.4 yuan (6.3 cents) will be offered for every cubic meter of shale gas developed by enterprises during the 2012-2015, the news agency said citing a ministry statement.  Local governments may introduce separate incentives according to regional needs, the statement said.

China offered 20 shale gas blocks in a second tender, with a total area of 20,002 square kilometres in 8 provinces. Five blocks are in Guizhou and Hunan each, three in Chongqing, two in Hubei and Henan and one each in Jiangxi, Anhui and Zhejiang.

Estimates have said Chinese shale gas reserves surpass even that of North America and will be sufficient for the next 60 years at the current Reserve to Production (R/P) ratio.