China National and Shell to go drilling

   Date:2007/12/21     Source:

CHINA National Petroleum Corp, the nation's largest oil company, has signed an agreement to expand cooperation with Royal Dutch Shell Plc.

The companies will "deepen" the work they do in oil and gas, Beijing-based China National, parent of PetroChina Co, said in a statement yesterday without giving details of the accord, Bloomberg News reported. The pact with Europe's biggest oil company follows alliances China National has forged this year with Chevron Corp and StatoilHydro ASA as it seeks to unlock less accessible reserves.

PetroChina and Shell started joint gas output from the Changbei field in northern China in March.

"This is a win-win for both Shell and PetroChina," said Gordon Kwan, head of energy research at CLSA Ltd in Hong Kong. Shell's expertise in high-sulfur gas fields and deep water drilling could help the Chinese company and its parent meet their growth plans, he said.

The pact signals that "strategic cooperation has entered a new phase of development" between Shell and China National Jiang Jiemin, president of the Chinese company, said in the statement.

Jiang and Shell Chief Executive Officer Jeroen van der Veer signed the "framework cooperation agreement" in Beijing.

China National signed a 30-year accord with Chevron, the second largest US oil company, in Beijing earlier this week to jointly produce gas from the Chuandongbei field in southwestern China.

Chevron, the operator of the project, will have a 49-percent stake.

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