UPDATE 1-Anton, Schlumberger to focus on China shale gas sector

* Anton eyes Schlumberger's shale gas technology

* Shale gas development at early stage in China

* Anton benefiting from China's rapidly growing gas industry

HONG KONG, July 12 (Reuters) - Anton Oilfield Services Group plans to strengthen ties with Schlumberger Ltd in shale gas development in China after the North American oilfield services company took a stake in it, the Hong Kong-listed Chinese company said on Thursday.

Shale gas development is still at an early stage in China, the world's largest energy user, where technically recoverable reserves of the unconventional fuel are estimated to be even higher than in the United States.

China, which wants to draw more private investment into its energy sector to help shore up economic growth, is expected to hold its second shale gas auction this month, with private investors allowed to bid for the first time.

"Through the stock purchase, Schlumberger hopes to strengthen its ties with Anton Oilfield in China," Anton chairman Luo Lin told reporters at a conference call to brief on the company's business strategy.

"We are in talks to expand our cooperation. I believe unconventional gas is an area with bright prospect for cooperation. Shale gas will be a focus of our cooperation."

Schlumberger can help improve Anton's shale gas drilling technology known as hydraulic fracturing, while it can also use Anton's staff manpower to help it expand in China, he said.

Schlumberger this week acquired about 20.1 percent of the privately-controlled Chinese oilfield service provider for an estimated $80 million, amid a rapid increase in China's natural gas demand.

Anton Oilfield, which was founded in 1999 and now has about 1,000 employees, has said it first entered into a strategic cooperation agreement with Schlumberger in 2010 in drilling fluids and well-cementing services.

The Chinese company has also been working with Schlumberger in gas storage service and gas exploration in the Tarim basin in northwest China, Luo said.

Anton Oilfield has said Schlumberger would not be involved in the management of Anton and its cooperation with other business partners would remain unchanged.

Shares of Anton ended down 3.82 percent at HK$1.51 on Thursday, underperforming a fall of 2 percent in the benchmark Hang Seng.

Anton, whose stock price has risen 33 percent in the past month, said late on Wednesday its first-half annual profit should increase substantially as it benefits from rapid development of China's natural gas industry.