Shell Start Drilling for Shale Gas in China

Royal Dutch Shell, together with PetroChina, have started drilling the first evaluation well in a shale gas block in China.

China Petroleum Daily, a newspaper run by PetroChina's parent, China National Petroleum Corporation (CNPC) reported the news, 13 months after the two firms inched a joint exploration agreement.

The scale and investment of the wildcat, Yang 101 well on the Fushun-Yongchuan shale gas block in south-western Sichuan province, were "sizable," the report said, without providing details.

Chuanqing Drilling Engineering Company, a unit of CNPC, was the contractor, according to the newspaper report.

China targets to reach an annual production capacity of 15 billion to 30 billion cubic meters of shale gas by 2020.

PetroChina and Shell are also partnered at the Changbei natural gas field in the Shaanxi province of China.