Global oil and gas company Shell has signed an agreement with the Chinese state-held oil and gas company Sinopec to study the development possibility of a shale oil block in East China (Dongying trough of Shengli, in Shandong) as parts of efforts to unlock the country's potentially massive unconventional resource. The Dongying trough is part of the Bohai Rim basin, where China National Petroleum Corp (CNPC) is developing a small shale oil field (average production of 50 kt/year).
China is developing its vast shale oil and shale gas resources; in 2018, shale oil production made up less than 1% of China's total crude oil production, while shale gas accounted for 6% of domestic gas production. According to the Ministry of Natural Resources (MNR), the domestic shale oil has very low permeability, which means very low per well output that makes them most of the time rather uneconomic. Domestic shale oil resources are trapped in eastern regions such as the Songliao and Bohai Rim basins - some other areas such as Ordos and Junggar basins are also expected to hold large shale oil resources - while shale gas resources are highly concentrated in Sichuan.