(EnergyAsia, February 28 2013, Thursday) — Hours after CNOOC Ltd completed its US$15.1 billion purchase of Canada’s Nexen, another Chinese state Sinopec said it had agreed to pay more than US$1 billion for a 50% stake in US-based Cheaspeake Energy which is developing oil-rich shale fields in Texas, Colorado and Wyoming states.
The swoop will expand China’s growing reach into North America’s oilsands, shale and deepwater acreages in the Gulf of Mexico as well as the UK’s North Sea. It will also help China build up its technology base in developing and producing hydrocarbons from unconventional sources like shale and deepwater acreages.
With the part sale of its Mississippi Lime play in Oklahoma to Sinopec International Petroleum Exploration, Chesapeake, one of America’s leading unconventional gas developers, will reduce its heavy debt level of some US$16 billion. Cheapeaker said its Mississippi Lime and other formations held reserves of 140 million barrels of oil equivalent (BOE) and yielded a net production of 34,000 BOE per day in the fourth quarter of 2012.
By taking over Nexen, CNOOC Ltd is targeting to raise its oil and gas output by between six and 10% per year between 2011 and 2015.
To fuel China’s growing economy and appetite for natural resources, the government is encouraging its companies to use the country’s foreign exchange hoard of US$3.3 trillion to acquire producing assets and technology from abroad. China’s domestic oil production growth is slowing down as it its conventional fields are depleting rapidly.