OREANDA-NEWS. August 16, 2011. China is pushing for more diversity in the nation’s emerging shale-gas sector, potentially to the dismay of the central government’s powerful energy monopolies.

A minor, provincial government-owned concern was named one of two winners of shale-gas tenders in July, clearing the way for explorations south of the city of Chongqing, in an area straddling the municipality’s border with Guizhou Province.

Henan Provincial Coal Seam Gas Development and Utilization Co. won one block offered in the competition sponsored by the Ministry of Land Resources (MLR) after promising to invest a total 248 million yuan (USD 38.6 million).

Although private companies were not allowed to bid, Henan Coal’s victory marked a change in official attitudes toward oil and gas exploration and exploitation rights, at least in the shale-gas sector.

A senior MLR official told Caixin the competition was on an invitation-only basis to test tendering methods, and that the next round will be open to all qualified bidders.

Private enterprises are among those expected to participate in the next round, Zhang Dawei, deputy director of MLR’s Oil and Gas Strategic Research Center, told Caixin.

Another MLR official said the agency wants to use the shale-gas sector to shake up the status quo and challenge the monopoly power of Sinopec, CNPC and CNOOC, which together control most of the nation’s oil and gas resources, as well as most of the country’s shale-gas blocks.