China plans to speed up exploration of shale gas by asking companies, including PetroChina Co, to invest three times the minimum amount sought for crude oil areas.

The Ministry of Land and Resources is drafting rules that will allow it to seize blocks from companies that fail to invest at least 30,000 yuan (US$4,747) per square kilometer annually, Zhang Jianfeng, a director at the ministry's research institute, said yesterday.

Companies will have three years to meet the requirement, he said.

China holds 25.08 trillion cubic meters of exploitable reserves of the unconventional fuel trapped in shale rock, the ministry said on March 1, citing a nationwide survey.

The government has pledged to prioritize land approvals, allow tax-free equipment imports and offer subsidies to explorers.

The policy "will certainly prevent companies from sitting on acreage," Neil Beveridge, a Hong Kong-based analyst at Sanford C. Bernstein & Co, said in an e-mail.

The proposed rules will be similar to those for conventional oil and gas exploration, where the minimum annual investment requirement is set at 10,000 yuan per square kilometer, Zhang said in Beijing, while attending a two-day Shale Gas Summit which was organized by the Center for Management Technology.

More than 100 Chinese companies have qualified to participate in China's second auction of shale exploration area, which will likely be held before July, the official said. The government will offer at least 20 areas, he said.