Sinopec, PetroChina turn upbeat on Chinese shale gas

|By:, SA News Editor

China energy heavyweights Sinopec (NYSE:SNP) PetroChina (NYSE:PTR) have raised their outlook on the country's shale gas industry but stopped short of predicting a near-term boom.

Costs are coming down sharply, SNP Chairman Fu Chengyu said at the company's H1 results briefing earlier this week, citing the cost of shale gas drilling at the Fuling field - the country's largest shale gas project - which has been falling steadily to ~60M yuan ($9.8M) per well.

PTR Vice Chairman and President Wang Dongjin said the company is keeping its drilling cost at 55M yuan per well and will strive to keep it under 50M.

But Fu and Wang both ruled out the possibility of a shale gas boom in the near future, saying costs must come down much more and gas prices must rise further to justify a substantial step-up in investment.