Slow going in China’s shale gas sector|Markets|Business|

The enthusiasm that China’s private sector initially expressed over the excavation of shale gas has dampened, with the Chinese government lowering production estimates by 50% recently.China’s National Energy Administration recently brought down shale gas production estimates for 2020 to 30 billion cubic meters from its earlier estimates of 60 to 100 billion cubic meters.This was a result of delays in the third round auctions of excavation rights because of the lack of interest among private businesses and the slow progress made by the ones that won earlier rounds of bidding.When the government began accepting bids from private businesses in the previous rounds of the auction held in early 2013, more than 30 companies participated, indicating the vast interest in shale gas at that time.However, the two private companies that won the bid, Huaying Shanxi Energy Investment and Beijing Taitantongyuan Natural Gas Technology, have not reported much progress.Analysts explained that the lowered interest of the private companies in shale gas resulted from the uncertainties surrounding the excavation and the massive investment required during the initial stages.When compared to their resourceful state-owned counterparts, lack of funds and required technology also dampened the initial enthusiasm of the private firms, industry insiders noted.As such, many private businesses are opting to simply wait and watch, with several companies taking part in the auctions only to establish a position in the field while waiting for bigger players in the market to succeed so they can replicate them.

via Slow going in China’s shale gas sector|Markets|Business|