THE WALL STREET JOURNAL: Shell In Talks With China Jilin Govt On Oil Shale Project: “Royal Dutch/Shell Group is in talks with the provincial government of Jilin to develop oil shale deposits in the northeastern China province.” (ShellNews.net) 23 Nov 04

DOW JONES NEWSWIRES

November 23, 2004 2:24 a.m.

SINGAPORE -- Royal Dutch/Shell Group (RD) is in talks with the provincial government of Jilin to develop oil shale deposits in the northeastern China province.

"We are in the early stages of discussion regarding the possibility of cooperation" with the Jilin government, a Shell spokeswoman said Tuesday.

Shell has made initial contact with the Jilin government to understand the quality and quantity of the oil shale resources, she said.

China is estimated to have the fourth largest shale deposits in the world at 31.57 billion metric tons, after the U.S., Brazil and Russia.

Jilin holds 17 billion tons, or 56%, of China's oil shale deposits.

In June this year, China's National and Reform Commission, the country's top economic planning body, approved a major oil shale project in Jilin with an estimated investment of CNY2.75 billion.

State-owned China Energy Conservation Investment Corp. is said to be the biggest investor in the project, which will be built in Jilin's Huadian city. Construction is expected to begin in 2005, with completion due three years later.

Oil shale is a compact rock of sedimentary origin, with ash content of more than 33% and containing organic matter that yields petroleum when destructively distilled.

When the shale rock is heated it forms a smoke or vapor, which forms a liquid called Syncrude, or shale oil, when cooled. Syncrude contains 10% naphtha, 40% kerosene, 40% diesel fuel, and a 10% nitrogen rich residual fuel.

-By Calvin Lee, Dow Jones Newswires; +65-6415-4063; calvin.lee@dowjones.com

-Edited by Hilary Mc Cully