BP becomes last western firm to exit Chinese shale market

Oil major BP is set to become the last international company to withdraw its Chinese fracking projects, as results fail to live up to expectations, according to reports.

The firm follows Shell, Exxon Mobil, Conocophillips and ENI in pulling out of the country, leaving only domestic companies in charge of the sector.

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Sources told Reuters the results from between eight and 10 wells were disappointing. One was drilled to 14,300 feet and produced around 10,000 cubic meters of gas a day.

Shale production in the US has soared in recent years, recently putting such pressure on international energy prices that oil producing cartel Opec had to cut its output.

The price of Brent crude fell from around $85 per barrel in October last year to just over $50 late last year. Prices have rebounded since Opec’s cuts took hold at the beginning of the year.

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Shale production in China, however, is still in its infancy, only making up around six per cent of natural gas output.

Extracting the country’s massive resources has been complicated by challenging geology, and a difficult operating environment.