China has approved a production-sharing contract with Royal Dutch Shell for the Fushun shale gas block in the Southwest China's Sichuan Province, with the global oil firm preparing to step up drilling activities in the country.

The government nod comes a year after Shell first inked the contract to develop the shale gas block with China National Petroleum Corporation.

The contract is the first of its kind to be approved by China, Shell spokeswoman Li Lusha said on the sidelines of a conference in Beijing.

Shell has committed to spend at least $1 billion a year exploring China's potentially vast shale gas resources, the company told Reuters last August.

International energy firms have expressed concern that Beijing has not yet established the regulatory framework required to develop shale gas.

But the Fushun approval could signal a way forward. An industry official with direct knowledge of the approval process said the contract was treated in much the same way as a conventional natural gas project.

Shell CEO Peter Voser told reporters that the company was currently preparing for a "significant drilling season" for shale gas in China this year and the next. "We have plans for a significant drilling season in 2013 and 2014. We are ramping up investment here (in China)."