PetroChina wants Shell's expertise to unlock the unconventional gas and oil resources, such as shale gas, that require new techniques to extract. Shell wants PetroChina's help in gaining access to the mainland, China's newly hot gas fields, and its energy-hungry consumers.

The U.S. Energy Information Administration said in April that Chinese shale may hold 1,275 trillion cubic feet of gas, 12 times the country's conventional natural gas resource. The "technically recoverable" reserves are almost 50 percent greater than the 862 trillion cubic feet estimated for the U.S., the agency said.

Last year, China became the largest energy consumer in the world, surpassing the U.S., according to BP Plc's Statistical Review of World Energy. China is expected to account for almost half the world's growth in oil consumption in the next two decades, becoming the largest market for oil, and it's trying to more than double the use of gas in its economy, to 8 percent of the energy mix, by 2015.

Eoin Treacy's view One of the main challenges for major energy companies is gaining access to promising new discoveries because they are so often in foreign jurisdictions where national governments want to hold onto the lion's share of potential profits. Resource nationalisation is a persistent theme. One of the reasons companies such as Exxon Mobil and Shell now produce more gas than oil is because they have been shut out of major new oil discoveries in many parts of Africa and particularly Brazil. If they wish to participate in countries with large national interests, they have little choice but to team up.

Many companies seeking to do business in China have had to weigh the consequences of technology sharing with local partners. Energy is unlikely to be any different. The Chinese are well aware of their unconventional resource base and have been buying into unconventional oil and gas operations in North America in an effort to gain access to the technology required to exploit them. Therefore, it is not a question of if but when China's energy companies become more proficient in developing their own fields. For a company such as Shell, the argument for becoming an enabler is compelling. Their conclusion is likely to have been that in the long run, it is probably better to have China's national oil and gas company as a partner than an adversary.

Technological innovation has been the edge major energy companies have used to promote themselves for decades. They may have to share their know how to gain access to fields in China, the Middle East or Brazil but that should not impinge their ability to continue to represent the forefront of technological innovation.

Royal Dutch Shell's (4.68%) share price has been largely rangebound for the last decade but hit a new high in March and continues to consolidate in the region of the upper side of the long-term congestion area. The share has held a progression of higher major reaction lows since late 2008 and a sustained move below 1900p would be required to question medium-term scope for additional upside.

PetroChina (4.2%) also found support in late 2008 but has been largely rangebound since early 2009. The share is currently mid range and a sustained move above HK$12 will be required to suggestion a return to medium-term demand dominance.