China's shale gas prospects have been dealt a blow after Royal Dutch Shell reportedly withdrew from a joint study agreement following an unsuccessful drilling campaign. Sources say Shell decided not to enter into a production sharing contract (PSC) with state-run Sinopec for the Xiang E Xi Block, which straddles Hubei, Hunan and Jiangxi provinces, as well as the municipality of Chongqing, after initial drilling showed limited reserve potential.
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