Chinese groups flock to shale gas projects Small Chinese energy companies are piling into shale gas exploration projects as the country seeks to boost investment in unconventional energy and replicate the experience of the shale gas "revolution" in the US. The latest bidding round for China's shale gas blocks drew bids from a record 83 companies, according to a government statement, many of whom are privately owned - highly unusual in the state-dominated energy sector. Beijing has been trying to promote investment and encourage competition in shale gas by including private companies and smaller companies. The shale bids also represented one of the government's boldest efforts yet to open new areas of investment to private companies who have long complained of monopolies in some of the economy's most profitable sectors. However, analysts say that the latest tender suggests authorities may have gone overboard in their efforts to diversify. Many of the bidders lack experience in oil and gas, and the bidding companies include two real estate groups, several power utilities, an energy trading company and even a coal mining company, according to public statements. China is the world's largest energy consumer and policy makers have prioritised shale gas exploration in the hope that it will provide a plentiful, cheap, and clean new energy resource. By some estimates China has the largest potential reserves of shale gas in the world - and if successful the country's push into shale gas could dramatically reshape global energy markets. But development of shale gas in China has been slow, with only a handful of shale gas wells drilled to date, and energy executives say it will be difficult for Beijing to meet its target of 60bn cu metres of shale gas production by 2020. In an effort to boost exploration investment the costly sector, Chinese authorities started putting prospective shale gas blocks up for public auction last year - an unusual move in a country where are usually allocated by the state to either CNPC or Sinopec. "Innovation in oil and gas has always come from crazy small entrepreneurs," said Laban Yu, energy analyst at Jefferies in Hong Kong, citing the example of shale gas in the US. China is trying to do it right . . . trying to create innovative, small exploration and production companies. To attract interest from a wider variety of companies, Beijing promised subsidies and supportive financial policies for shale gas in a blueprint this year. That plan also laid out the entry criteria for new companies who wanted to work in shale gas, lowering the bar to include smaller companies and emphasising the importance of foreign co-operation. These changes have drawn a wide range of companies to throw their hats in the ring for the latest shale gas blocks. The most recent round of bidding was also open to foreign joint ventures, but the government did not disclose how many foreign joint ventures had taken part. "To put it bluntly, it's like gambling," said one executive of a private company involved in the bidding, according to an interview with NetEase Business, a news portal. Many of these companies have nothing to do with this industry . . . Once they win the bid they can transfer [the right] or explore it with other qualified and capable companies. If they don't win they have nothing to lose. Mr Yu, the Jefferies analyst, estimates that the "vast majority" of the bidders has no experience drilling for oil or gas. "These are guys who made their first billion on property, coal, or fruit drinks and are trying to figure out how to make another billion," he said.