Shell share price: Oil major expands partnership with China’s CNPC

on Apr 9, 2014
Updated: Apr 9, 2020
Listen, Wednesday, April 9: Royal Dutch Shell Plc (LON:RDSA) has signed a deal with China National Petroleum Corp (CNPC) to boost cooperation in sectors such as deep sea exploration and shale gas, the Beijing-backed company has said.

Shell’s share price has climbed about 0.3 percent in London so far today.
Shell, CNPC sign cooperation agreement
CNPC said today in a statement that it had signed cooperation documents with Shell following “a candid and friendly discussion” between CNPC’s Chairman Zhou Jiping and Shell’s chief executive Ben van Beurden.
CNPC noted that the two companies had agreed to boost cooperation in deep water, liquefied natural gas (LNG), unconventional resources such as shale, and upstream and downstream businesses.

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Reuters reported that van Beurden, in his first overseas visit since taking the helm at Shell in January, told Zhou that both sides had set up deep and wide-ranging ties and had huge room for further cooperation.
China focus
Shell has already partnered with CNPC to develop unconventional gas in China. The two companies signed a production sharing contract for shale gas exploration and production of the Fushun-Yongchuan block in Sichuan Province during March 2011.

While the Anglo-Dutch oil major hopes to apply its experience gained during the development of shale gas in North America, the company recently reorganised its American shale gas and oil operations as it has struggled to keep up with smaller, independent companies which have spearheaded the US shale revolution. (Shell share price: Group reorganises American shale operations)

Shell also plans to build, in partnership with CNPC, a refinery and petrochemical complex in the eastern part of China. In addition, the FTSE 100 company is also a major LNG supplier to China, securing gas from its fields in Australia and elsewhere.

Last month, the company opened a new technology centre in Shanghai, dedicated to R&D into lubricants and oil. Mark Gainsborough, Executive Vice-President of Shell Lubricants, explained in a statement that the centre reflected the direction of the company’s lubricants business, “and the central role that China plays in its long-term growth strategy”.
**Analysts on Shell**
On Monday, analysts at Credit Suisse reiterated their ‘outperform’ rating on Shell with a price target of 2,450p. JPMorgan Chase & Co, which has a ‘neutral’ rating on the Anglo-Dutch group, last week boosted its price target from 2,270p to 2,325p, while Canaccord Genuity last month reaffirmed Shell as a ‘buy’ with a price target of 2,650p.
Shell currently has a consensus ‘hold’ rating and an average price target of 2,398.24p.
**As of 10:10 BST, buy Shell shares at 2207.00p.**
**As of 10:10 BST, sell Shell shares at 2206.00p.**


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