Chinese oil major, Sinopec, is set to buy stakes in two American oil and gas properties.
A Chesapeake rig Image: Chesapeake Energy |
In a bid to increase its presence in the booming North American shale gas industry, China Petroleum and Chemical Corp (Sinopec) will pay around $1bn for half of Chesapeake Energy Corp’s Mississippi Lime oil and gas properties.
As well as gaining a foothold in the US market, the acquisition will also grant the Sinopec access to advanced technologies, such as hydraulic fracturing.
China is believed to have the largest shale reserves in the world, so securing the know-how to exploit those resources is essential for the nation’s energy companies.
Recently, fellow energy giant CNOOC purchased Canadian oil and gas company Nexen Inc for $15.1 billion in the hopes of acquiring more advanced technology.
Although the deal with Chesapeake, the second-largest gas producer in the U.S., is roughly $200 million below the average asking price for a similar acreage, it should help the Oklahoma City-based company reduce its staggering $12 billion pile of debt.