Shale gas exploration in China is still in its infancy. It is proven that shale gas occurs in most of Chinese basins by geologically comparing the hydrocarbon generation with those in the eastern U. S. These basins would be the key target for shale gas exploration. The mid-eastern region, the southern region, the northwestern region, and the Qinghai-Tibet region present broad prospect for shale gas exploration. The southern region in particular has stable thick hydrocarbon-rich shale formations. Shale gas, with a typical"self-generation and self-accumulation" feature, is resistant to damage, despite of the strong late tectonism. Direct evidence of shale gas development in Sichuan Basin has been found, e.g., Weiyuan. Shale gas exploration should start in the area of high organic matter abundance and high degree of thermal evolution, preferably accompanied by the development of natural cracks

Shale gas is different from conventional gas that most developed, it shows uniqueness in generation and accumulations, and the method to discriminate shale gas also differs from those for conventional natural gas. Total organic content and maturity level are key parameters used for shale gas evaluation. By the knowledge of these geochemical parameters, in addition to the loss of available samples for geochemical analysis, well logging data could be used for calculating these two parameters and be a great benefit to shale gas recognition. Total organic content represents the potential of shale gas generation and maturity level represents kerogen's thermal maturity, both are combined to indicate the amount of gas stored in shale reservoirs

Lower Cambrian black shale is widely distributed in the Upper Yangtze Region. When global sea-level rose rapidly in the Early Cambrian, the Region became the regional deep water to the slope of the continental shelf environment of deposition with stranded anoxic environment. The lithology of the black shale is black carbonaceous shale, siliceous black shale, dark gray stone coal and silty shale. The organic matter content is as high as 12% in mud shale. It in the section decreases from bottom to up. The mud shale of rich organic matter is mainly distributed in the lower section, while the thick one is in the regions of southwestern Sichuang to northern Guizhou, eastern Chongqing to western Hunan and Hubei, and northeastern Sichuan. These regions represent the most shale gas exploration potential.

Mud shale deposition takes the majority of Silurian in Yangtze Region. Mud shale of rich organic matter presents in Lower Longmaxi Formation. It was deposited as sea level rose rapidly in the Rhuddanian. Influenced by ancient terrain of platform, thick hydrocarbon-rich mud shale is mainly distributed in eastern Sichuan, western Hubei and northern Hunan. Longmaxi mud shale is mainly sandy shale containing carbon powder that is distributed stably. Measured total organic carbon values (TOC) exceed 6.5% and total thickness (TOC>1.0%) approximate 105m in Shizhu area of Sichuan. The organic matter type is mainly I or II types and has highly thermal maturity. The potential of exploration for shale gas is great in the region.

Gas-bearing shale is usually either as source rocks, but also can serve as reservoir and seal. As source rocks, its production is closely related to total organic content (TOC), thermal maturity (Ro) and total net thickness of shale sediments. As reservoir, shale possesses low porosity and permeability, so it can serve as seal. The gas in shale might be mainly stored as absorbed gas on kerogen and clay-particle surfaces, or free gas in natural fractures and intergranular pores. Based on the study of the coalbed methane (CBM) desorption mechanism, the adsorption mechanism of gas in shale and the detection of natural fractures in shale gas reservoir are demonstrated. Taking Sichuan basin for an example, the geochemical characteristics of source rock and occurrence of the gas in the basin are discussed

Shale gas has its own accumulation mechanism and requires secific geological conditions. Its formation is mainly controlled by such factors as thickness, area, total organic content (TOC), organic matter maturity, mineral composition, pressure and temperature of the mud shale. Shale gas assessment is summed up in three aspects: gas generating capacity, gas accumulating capacity and easy exploitation. Shale from bottom to up is mainly distributed in Sinian Doushantuo Formation, Lower Cambrian, Middle Cambrian, Upper Devonian and Permian in Southern Guizhou Depression. Through geochemical analysis, it is considered that this area has the basic conditions for shale gas accumulation. Mud shale features in wide distribution, big thickness, high organic matter content an high thermal evolution degree, and more silicastone in the high-carbon shale series of Lower Cambrian (∈1) and Permian Wujiaping Formation (P2w) which are most favorable for exploration.