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Shell May Invest $1 Billion a Year in China, CFO Says

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Royal Dutch Shell Chief Financial Officer Simon Henry (said the Hague-based oil producer is looking at jointly expanding its gas acreage in mainland China with PetroChina Co. Photographer: Jock Fistick/Bloomberg

By Bloomberg News – Sep 14, 2010 12:07 PM GMT+0100

Royal Dutch Shell Plc, Europe’s biggest oil company, may invest $1 billion a year in China should two wells in Sichuan province show potential for commercial gas production, its chief financial officer said.

“With successful exploration, we could easily invest $1 billion a year in the following five to seven years,” Simon Henry said in an interview today in Tianjin, China. “The geology could be as attractive as the U.S.”

Shell expects the share of gas in China’s total energy use to rise to 10 percent in a decade’s time from 4 percent now, according to Henry on April 28. The Hague-based oil producer is looking at jointly expanding its gas acreage in mainland China with PetroChina Co., he said today.

“We should start drilling in the next couple of months in both areas,” Henry said, referring to the Sichuan test wells.

PetroChina and Shell had signed a joint shale-gas assessment agreement for the Fushun-Yongchuan block in Sichuan, Adam Newton, a Shell spokesman, said on Nov. 27. That was Shell’s second gas exploration venture in mainland China following a project in Changbei gas field in Shaanxi province.

Chua Baizhen. Editors: Ryan WooJohn Chacko.

To contact the Bloomberg Staff on this story: Baizhen Chua in Tianjin at[email protected]

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