Sinochem and Hess Enter into Shale Cooperation Deal

Sinochem Corp., has signed a shale oil and gas agreement with Hess Corp., the US-based oil producer and refiner.

State owned Sinochem and Hess will establish a working committee to regularly discuss shale oil and gas technology, evaluation, laws, tax and business activities, and further cooperate in China's onshore shale oil and gas exploration and development.

The two companies will also cooperate in global oil and gas exploration and development, Sinochem said. It did not provide more details.

China will auction eight shale gas exploration blocks in the first quarter of this year, two more than first planned and months later than originally scheduled for November last year, and Sinochem is one of the domestic companies eligible for the contest.

Sinochem, a former oil trading monopoly in China, has built up an overseas oil and gas portfolio in recent years but it did not have any exposure in the domestic upstream sector.

China's onshore oil and gas exploration and production are dominated by PetroChina and Sinopec and offshore activity is mainly conducted by CNOOC, parent of CNOOC Ltd.

Hess operates in the shale oil plays of the Bakken in North Dakota and the Paris Basin area of France.

Source: Reuters