Reuters: China Fines Sinopec for Under-spending on Shale Gas Block

China's Ministry of Land Resources (MLR) fined Sinopec Corp for failing to fulfil spending pledges on a shale gas block, in what a government source said is a move to toughen supervision of oil and gas exploration concessions.

China, believed to hold the world's largest technically recoverable shale gas resources, aims to replicate the boom that swung the United States from building liquefied natural gas (LNG) import terminals to building LNG export facilities.

But a lack of rapid development has frustrated Beijing. Four years of work have so far yielded only one large find - Fuling field - in the most prospective gas province of southwest Sichuan. Experts say the Fuling success is hard to repeat due to complex geology and high costs.

MLR, in charge of mining rights and also the main agency behind the shale gas push, fined Sinopec about 8 million yuan ($1.3 million) for missing the spending pledge for a block awarded in 2011 in China's first shale gas tender, the ministry said in a statement on Monday. MORE