ConocoPhillips has entered into a set of agreements with PetroChina whereby PetroChina will acquire an interest in two Western Australia exploration assets and establish a Joint Study Agreement (JSA) for unconventional resource development in Sichuan Basin in China.
Under these agreements, which still require government and partner approvals, PetroChina will acquire a 20% working interest in the Poseidon offshore discovery in the Browse Basin, and 29% in the Goldwyer Shale in the onshore Canning Basin (Australia). In addition, ConocoPhillips will enter into a Joint Study Agreement to identify unconventional resource reserves in the Neijiang-Dazu Block in China’s Sichuan Basin.
Under the JSA, ConocoPhillips and PetroChina will study the potential for unconventional resource development in the Neijiang-Dazu Shale Block in the Sichuan Basin. The joint study will be an important step in evaluating the potential for unconventional resource exploration in the area. If technically and commercially viable, the companies will advance development under a production sharing contract, which would be agreed upon during the study period.
This transaction met mixed reactions in Australia. PetroChina's acquisition is seen as a clear endorsement for the Australian LNG industry on the one hand, as a bad signal on the other hand, referring to major companies such as BHP Billiton selling out its stake in Browse LNG.