Sinopec full steam ahead with shale gas rev­o­lu­tion

China Daily (Hong Kong) - - BUSINESS -

Chi­nese bike-shar­ing startup Ofo Inc will soon of­fer more bi­cy­cles in the United King­dom and the United States af­ter its trial op­er­a­tions in the two coun­tries gained pos­i­tive feed­back from lo­cal con­sumers, co-founder Yu Xin said.

The move also came af­ter the com­pany gained more than 100,000 cus­tomers in Sin­ga­pore within just 100 days, an ex­pe­ri­ence which gives it con­fi­dence in ac­cel­er­at­ing over­seas ex­pan­sion, de­spite mount­ing com­pe­ti­tion from ri­val Mo­bike Tech­nol­ogy Co Ltd.

“Ofo’s trial op­er­a­tion in Cam­bridge in the UK has con­cluded and we are about to launch more bikes soon,” Yu said. “The trial op­er­a­tion in the US is still on­go­ing, but we will also move into of­fi­cial op­er­a­tion soon in sev­eral lo­cal cities.”

Yu did not of­fer de­tails about how many bi­cy­cles it will add in the two coun­tries. It started trial projects in Cal­i­for­nia in March and Cam­bridge in April, where in both lo­ca­tions it has around 20 em­ploy­ees. As Ofo steps up ex­pan­sion, “the num­ber will grow fast in fu­ture”, Yu said.

The com­pany an­nounced last week that it had raised more than $700 mil­lion from in­vestors in­clud­ing Alibaba Group Hold­ing Ltd. The new cash will fi­nance its plan to more than triple its yel­low bikes to 20 mil­lion in 200 cities glob­ally by the end of this year.

In Sin­ga­pore, the first over­seas des­ti­na­tion it en­tered in Fe­bru­ary, Ofo now pro­cesses more than 20,000 trips ev­ery day, with more than 10,000 bi­cy­cles. It also has a team of over 30 peo­ple to op­er­ate lo­cal ser­vices.

It is work­ing with gov­ern­ment bod­ies, town coun­cils and other lo­cal play­ers to estab­lish more than 100 pre­ferred park­ing zones in pub- lic hous­ing es­tates.

“We aim to re­lease over 1,000 bi­cy­cles across 28 dif­fer­ent hous­ing es­tates in Sin­ga­pore by the end of the year,” Yu said.

Wang Chenxi, an an­a­lyst at Bei­jing-based re­search com­pany Analysys, said Ofo is see­ing ex­plo­sive growth in the num­ber of users, but how to main­tain them will be a tougher ques­tion.

To cater to Sin­ga­porean con­sumers, Ofo re­designed its bi­cy­cles, equip­ping them with a rear brake box that in­creases travel safety and sta­bil­ity, and a wa­ter bot­tle holder.

In the lat­est ver­sion of the Ofo app, the com­pany has con­nected with Google Maps ser­vices. Cy­clists can also in­put their de­signed route di­rectly into the app, and the map will highlight nearby park­ing zones and at­trac­tions. It is also part­ner­ing with AXA In­sur­ance, to in­sure the trips users make on Ofo bi­cy­cles. might also ham­per the de­vel­op­ment, as ex­per­tise to ac­cess the im­mense shale de­posits is also nec­es­sary, she said.

For­eign in­vestors have been pulling back from Chi­nese shale gas ex­plo­ration in re­cent years, in­clud­ing Cono­coPhillips of the US, which has quit shale gas ex­plo­ration in China af­ter aban­don­ing a sec­ond block in the Sichuan basin ear­lier this year, con­sid­er­ing the block did not meet its bench­mark for com­mer­cial de­vel­op­ment.

“We need the tech­nol­ogy and the knowhow to di­ver­sify and re­duce risks by work­ing with these com­pa­nies on com­pli­cated projects”, she said.

How­ever, con­sid­er­ing the nat­u­ral gas price is likely to wit­ness a surge in the fu­ture and given Sinopec’s ded­i­ca­tion to in­crease shale gas out­put and re­duce costs, the fu­ture is promis­ing, she added.

Ac­cord­ing to the oil and gas re­serve as­sess­ment of­fice un­der the Min­istry of Land and Re­sources, against the back­drop of low oil prices, China has come up with the core tech­nolo­gies for the ex­plo­ration and de­vel­op­ment of the shale gas, while achiev­ing the lo­cal­iza­tion of key equip­ment.

China has also set more than 100 tech­ni­cal stan­dards and sub­stan­tially re­duced the cost of shale gas ex­plo­ration in Ful­ing.

Ac­cord­ing to Sinopec, af­ter years of de­vel­op­ment, most of the key equip­ment for shale gas ex­plo­ration has been do­mes­ti­cally man­u­fac­tured, in­clud­ing the drilling wells, and the test­ing, ex­trac­tion and trans­porta­tion fa­cil­i­ties.

XIN­HUA

A worker checks fa­cil­i­ties at a shale gas field in Ful­ing, Chongqing.

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