December 27, 2012
The fifth-largest oil company in the world, China Petrochemical Corp. -- also known as Sinopec -- inked an agreement with ConocoPhillips (NYSE: COP ) to study and develop shale gas exploration in southwestern China's Sichuan Basin, according to a release on Sinopec's website.
Sinopec subsidiary Sinopec Exploration Southern Company will conduct the research with ConocoPhillips in a portion of the Sichuan Basin known as the Quijiang Block. The cooperation between the two companies is expected to last 24 months.
ConocoPhillips' entry into China marks the third major international oil company to launch shale operations in the world's second-largest economy, according to a Dow Jones Business News report. Previously, both Royal Dutch Shell (NYSE: RDS-B ) and Chevron (NYSE: CVX ) engaged in similar agreements, the latter also with Sinopec. The former went on to approve a larger production-sharing agreement with PetroChina (NYSE: PTR ) earlier this year, although the Chinese government has yet to announce approval for that.
The deal marks another agreement with U.S. interests for Sinopec. Earlier this year, the Chinese oil major completed a multibillion-dollar deal for a one-third stake in five of Devon Energy's (NYSE: DVN ) American shale gas fields.