Sinopec chairman Fu Chengyu said he expects shale drilling costs to fall by more than a third in the next three to five years.
The head of the Chinese state oil giant told reporters in Beijing that he predicted a shale well would cost around $50 million to drill in five years’ time, compared to $80 million at present, Reuters reported.
The cost of shale drilling was one of the factors thought to have led China to shelve its previous ambitious expectations for the country’s shale output ramp-up.
Earlier this month, China halved its shale gas production target to 30 billion cubic metres per annum by 2020.
Other hurdles faced by shale explorers include complex geology, mountainous terrain and low recovery rates.
Sinopec itself said trial development and appraisal of its Fuling shale gas project had resulted in a “significant breakthrough”, leading it to set a new target of 10 bcm for the south-western China project.
The Chongqing province field is producing 3.2 bcm as of the end of June, with aims to add a further 1.8 bcm this year to achieve 5 bcm output in 2015.
Sinopec said it would drill 91 wells altogether at the field, which is currently producing from 29 wells, and install gas gathering and processing facilities.
China’s Ministry of Land and Resources said last month that the field held 106.75 billion cubic metres of verified proven reserves.
The regulators said based on a site visit and data review that the mountainous play held high quality thick marine shale with high formation pressure and good gas composition.