Chevron to Explore for Shale Gas in China

HOUSTON - Chevron Corp. confirmed Thursday it has signed a joint agreement to explore for shale gas in China's Qiannan Basin.

The company "commenced seismic operations in July 2011," Chevron said in its 10-K filed with the Securities and Exchange Commission.

Chevron didn't disclose its partner, but local press has reported the agreement is with a unit of China Petrochemical Corp., known as Sinopec Group. Qiannan Basin is located in the southwestern province of Guizhou.

Chevron also said it plans to drill two exploration wells this year in Argentina's Vaca Muerta formation, targeting shale gas and tight oil resources. Chevron has been producing conventional oil in Argentina for many years but some of its concessions now have also shale potential.

The company's head of global exploration, Bobby Ryan, said earlier this month at an energy conference that Chevron's position in the El Trapial oil field has given the company a foothold in Argentina's emerging shale play.

In its 10-K filed Thursday, Chevron said the company reached an agreement last year to extend the El Trapial concession for an additional 10 years until 2032.

Chevron also plans to start a multiwell drilling program late this year in Romania, where it has 1.6 million acres in a shale concession. Chevron added it continues to hold negotiations to win license agreements for three shale exploration blocks in southeast Romania that comprise about 670,000 acres.

The moves show Chevron is going ahead with its plans to try to replace the U.S. shale boom overseas.

Copyright (c) 2012 Dow Jones & Company, Inc.


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