Halliburton (NYSE:HAL) recently signed an agreement with an affiliate of China's SPT Energy Group to establish a joint venture company focused on hydraulic fracturing and production enhancement services in Xinjiang. Last year, Schlumberger (NYSE:SLB) opened a reservoir laboratory in China to offer rock analysis services to support expanding exploration in unconventional shale plays. China has vast shale gas resources; however, the country lacks the technological expertise to develop these resources.

At the same time, China is looking to increase the share of natural gas in its energy mix. Indeed, shale gas can aid China's shift to natural gas from coal. And the likes of Halliburton and Schlumberger, with their technological expertise, can play a major part in developing China's shale resources.

Shale gas in China
According to estimates from the U.S. Energy Information Administration (EIA), China has 31 trillion cubic meters of recoverable shale gas. This is the largest for any country in the world. However, China's production was just 200 million cubic meters in 2013, accounting for 0.2% of the country's total natural gas production. In contrast, the U.S. produced around 300 billion in 2012, according to the EIA.

Environmental issues have forced China to cut its reliance on coal to meet its energy needs. In 2011, natural gas accounted for 4% of total energy consumption. The Chinese government expects to boost the share of natural gas to around 8% by end of 2015 and 10% by the end of 2020. The International Energy Agency (IEA) notes that Chinese gas demand could almost double to 315 billion cubic meters a year by the end of this decade. With this in mind, China recently inked a major gas deal with Russia.

However, the country is also looking to boost domestic production, and shale will certainly play a major part in this. In fact, shale could meet between a fifth and a third of China's gas demand if government targets are achieved. China is certainly making an effort to reach its targets.

China's efforts
China is spending four times as much as the U.S. to develop some of its fields. State-owned Sinopec (NYSE:SNP) is focusing on shale. According to Bloomberg New Energy Finance, Sinopec estimates that it will spend an average of $10 million per well at its Fuling site. The significant spending is helping, though. Sinopec, along with other state-owned giant PetroChina, appears to be on track to reach China's initial goal of 6.5 billion cubic meters in shale production by 2015.

Recently, the Chinese government verified shale gas reserves in Sinopec's Fuling field. According to the company, China's Ministry of Land and Resources verified proven reserves of around 107 billion cubic meters in the Fuling field. The company further said that as of June 30, daily output in 29 test wells totaled 3.2 million cubic meters.

While China appears to be on track to meet its 2015 shale production target, output will have to increase significantly after that for the country to meet its long-term target. That would a major challenge, given that much of China's shale gas reserves are held in mountainous terrain, which makes extraction difficult. China will certainly require the technological expertise of U.S. oilfield services firms if it has to hit its long-term production targets. This, as I noted in an article back in April, offers a major opportunity for U.S. oilfield services firms.

The opportunity
Indeed, developing shale gas resources in China will be a key growth driver for the likes of Schlumberger and Halliburton. Last year, Schlumberger opened a 32,000 sq. ft. reservoir laboratory in Chengdu, China. The new facility will provide rock analysis services to support expanding exploration activity in unconventional shale plays.

Recently, Halliburton also signed an agreement with an affiliate of SPN Energy Group in order to establish a joint venture focused on hydraulic fracturing and production enhancement services in Xinjiang. Dave Lesar, President and CEO of Halliburton, said that the company's basin-specific knowledge, industry-leading technologies, and expert people have solved unconventional challenges around the world.

China stands to benefit from the technological expertise of U.S. oilfield services firms. And with the Chinese government spending heavily to boost production from unconventional plays, there is a major opportunity for oilfield services firms. 

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Varun Chandan Arora has no position in any stocks mentioned. The Motley Fool recommends Halliburton. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.