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Bloomberg: PetroChina Parent, Shell Sign Cooperation Agreement (Update2)

By Winnie Zhu

Dec. 20 (Bloomberg) — China National Petroleum Corp., the nation’s largest oil company, 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 on its Web site today, without giving details of their accord.

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 deepwater 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 yesterday.

Liu Weijiang, a spokesman for China National, wasn’t immediately available for comment. Shell’s Beijing-based spokeswoman, Liu Xiaowei, declined to comment.

30-Year Accord

China National signed a 30-year accord with Chevron, the second-largest U.S. 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, the U.S. company said Dec. 18.

China National and StatoilHydro, Norway’s biggest oil producer, signed an agreement on “strategic cooperation” in March.

StatoilHydro is looking at opportunities, including both onshore and offshore exploration and production, research and development and possible investments in China’s natural gas market, Ole-Johan Lydersen, vice president of Stavanger-based StatoilHydro’s exploration and production strategy unit, said March 22.

PetroChina, the world’s largest oil company by market value, agreed Sept. 4 to buy 1 million tons a year of liquefied natural gas for 20 years from Shell’s Gorgon project in Australia.

StatoilHydro was created on Oct. 1 when Statoil ASA acquired the oil and gas assets of Norsk Hydro ASA.

To contact the reporter on this story: Winnie Zhu in Shanghai at [email protected] .

Last Updated: December 19, 2007 23:56 EST and its sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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