Singapore (Platts)--21Jan2013/717 am EST/1217 GMT

China on Monday announced the results of its second shale gas bidding round, awarding the 19 blocks on offer to 16 domestic companies.

The winners were announced at a press conference held by the Ministry of Land and Resources.

The 16 domestic companies comprise six state-owned enterprises, eight enterprises owned by local governments and two private-owned companies, the ministry said in a transcript of the proceedings. Coal and power companies won eight blocks.

The total investment for all 19 blocks is expected to be Yuan 12.8 billion ($2.06 billion) within the first three years of exploration, it added.

The ministry had announced the top three bidders for each block in early December, most of which were companies with no oil and gas experience. PetroChina was shortlisted for the Sangzhi block in Hunan province, but lost out to China Coal Geology Engineering Corp.

Article continues below...

Request a free trial of: Oilgram News
	Oilgram News brings fast-breaking global petroleum and gas news to your desktop every day. Our extensive global network of correspondents report on supply and demand trends, corporate news, government actions, exploration, technology, and much more.

The tender closed late October last year and the ministry had said it received 152 bids from 83 companies for the 20 blocks on offer. They spanned some 20,239 square kilometers across eight major provinces and cities. One block did not receive the minimum three bids and was excluded from the bid round.

Analysts had said PetroChina and other state oil and gas companies likely put in lower bids for the blocks as they already own existing shale gas acreage with better prospective and were in a better position to evaluate the acreage offered.

Lacking any drilling or oil and gas technology, the winners of the bid round are likely to seek foreign cooperation or join with other domestic companies to develop the blocks.

Chinese state companies are already working with a handful of international oil companies on other blocks in China, including Shell, Chevron and ConocoPhillips.

In the first shale gas round held in June 2011, the ministry invited just six companies -- PetroChina, China National Offshore Oil Corp., Sinopec, Shaanxi Yanchang Petroleum, China United Coal Bed Methane and Henan Provincial Coal Seam Gas Development & Utilization -- to participate.

Only two blocks were awarded as the other two failed to receive the minimum number of bidders. Sinopec won the Nanchuan block in Guizhou while Henan Provincial was awarded the Xiushan block near Chongqing city. China on Monday announced the results of its second shale gas bidding round, awarding the 19 blocks on offer to 16 domestic companies.

The winners were announced at a press conference held by the Ministry of Land and Resources.

The 16 domestic companies comprise six state-owned enterprises, eight enterprises owned by local governments and two private-owned companies, the ministry said in a transcript of the proceedings. Coal and power companies won eight blocks.

The total investment for all 19 blocks is expected to be Yuan 12.8 billion ($2.06 billion) within the first three years of exploration, it added.

The ministry had announced the top three bidders for each block in early December, most of which were companies with no oil and gas experience. PetroChina was shortlisted for the Sangzhi block in Hunan province, but lost out to China Coal Geology Engineering Corp.

The tender closed late October last year and the ministry had said it received 152 bids from 83 companies for the 20 blocks on offer. They spanned some 20,239 square kilometers across eight major provinces and cities. One block did not receive the minimum three bids and was excluded from the bid round.

Analysts had said PetroChina and other state oil and gas companies likely put in lower bids for the blocks as they already own existing shale gas acreage with better prospective and were in a better position to evaluate the acreage offered.

Lacking any drilling or oil and gas technology, the winners of the bid round are likely to seek foreign cooperation or join with other domestic companies to develop the blocks.

Chinese state companies are already working with a handful of international oil companies on other blocks in China, including Shell, Chevron and ConocoPhillips.

In the first shale gas round held in June 2011, the ministry invited just six companies -- PetroChina, China National Offshore Oil Corp., Sinopec, Shaanxi Yanchang Petroleum, China United Coal Bed Methane and Henan Provincial Coal Seam Gas Development & Utilization -- to participate.

Only two blocks were awarded as the other two failed to receive the minimum number of bidders. Sinopec won the Nanchuan block in Guizhou while Henan Provincial was awarded the Xiushan block near Chongqing city.

Tweet