The Rising Influence of Rising Affluence

[DewDiligence]

HES, PetroChina ink China shale-oil PSC:

http://www.reuters.com/article/2013/07/24/us-cnpc-hess-shale-idUSBRE96N0EL20130724

Hess Corp has signed a production-sharing contract with PetroChina, China's first joint agreement to develop a shale oil block, the companies said on Wednesday. ["First" because this is a deal for shale oil rather than shale gas.]

…Hess Corp, which has experience with shale oil in North Dakota, signed the deal on Tuesday to explore and develop the 800 square-kilometre Malang block of Santanghu basin in China's northwest region of Xinjiang. The contract follows a joint study by the two firms.

…Royal Dutch Shell and EOG Resources Inc were interested in the same basin, but only Hess officially entered a joint-study agreement, industry officials said.

…Both the Hess and Shell contracts [see #msg-43984089 for Shell's shale-gas PSC] are expected to follow the existing practice in China for conventional oil and gas development, industry officials say. Those contracts normally last 30 years, with the foreign party bearing all the cost of exploration, and the Chinese firm has the right to back in with a maximum 51 percent interest during the production stage.