Royal Dutch/Shell and Unocal of the US will form part of a US$1bn joint venture to drill for oil and gas in an offshore area 450km from Shanghai. CNNOC and China Petroleum & Chemical will each hold 30 per cent of the venture, with the two foreign companies sharing the remainder.
Analysts said the gas from the Xihu Trough area should be competitively priced. Importantly, it might turn out to be cheaper than supplies pumped 4,000km through a pipeline that PetroChina is building from western China to Shanghai.