BP joins hands with CNPC to tap into shale gas potential

BP Plc is joining hands with China National Petroleum Corp to unlock the potential of China's vast reserves of shale gas in the hope that it can generate a lucrative profit amid expectations of a rising oil price in the long term, an expert said on Tuesday.

The London-based energy giant signed its first shale-gas production deal with CNPC, the country's biggest oil company, to jointly develop the Neijiang-Dazu shale-gas block covering an area of about 1,500 square kilometers in the Sichuan Basin.

CNPC will be the operator of the project, while BP will use its technology in shale-gas exploitation. Calling it a win-win situation, Bob Dudley, BP Group's chief executive, said that the contract provides "fair and reasonable returns" for both companies.