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China's top economic planning body has approved a shale-oil exploration project between China National Petroleum Corp., the country's largest energy producer, and a foreign partner in the northwestern Xinjiang Uyghur autonomous region, it said Monday on its website.
 
The National Development and Reform Commission approved the project in November. It didn't name the foreign company involved in the joint venture, which is located in the Malang block in the Santanghu basin.
 
CNPC-controlled PetroChina Co. (PTR) was in talks with Royal Dutch Shell PLC (RDSA, RDSB) and Hess Corp. (HES) about forming a joint venture to develop shale oil in Santanghu, CNPC said in an in-house newsletter earlier this year.
 
The Turpan-Hami Oilfield Co., a unit of PetroChina, had received approval to develop shale oil in Santanghu with two companies, it said, quoting a company official.
 
Although the foreign companies would assume all investment and exploration risk for shale oil, all the parties in the joint venture would invest in developing shale oil, CNPC said, without elaborating.
 
China had an estimated 354 billion barrels of shale oil resources as of 2008, the World Energy Council said. However, China produced only about 7.6 million barrels of shale oil in 2008, it said.