"Most of these formations are buried much deeper than they are in America. Many of them are in remote areas where there isn't infrastructure to support their development and some in areas where there isn't a lot of water available," he added. Shale gas is extracted by a high-volume hydraulicfracturing (fracking) process that requires large volumes of water.
(Read more: How the US shale gas boom could derail China)
There is no doubt that China will develop a portion of its shale gas reserves, but how much of the large endowment will be developed is difficult to judge, said Tillerson.
Exxon Mobil has partnered with a domestic state oil firm to study to test shale potential in China. However, Tillerson says the company is in the early stages of evaluation.
"Various companies are working with Chinese national oil companies to understand how productive these shale resources will be, what kind of cost would be required to develop them and what kind of infrastructure build out is going to be required,"he said.
(Read more: US to be top oil producer for only four years)
"So it's really a question of pace, and I think it's going to be smaller at the front, and when some of these questions are answered, I think the pace will pick up quite rapidly," he added.
—By CNBC's Ansuya Harjani. Follow her on Twitter: @Ansuya_H