- CNTV English - CCTV News

Homepage > News > Biz >

Sinopec's 1st foray into shale

01-05-2012 14:47 BJT

China Petrochemical Corp has made its first foray into American shale by paying US$2.2 billion for a one-third stake in five emerging oil fields operated by Devon Energy Corp.

The move by Sinopec Group, as China Petrochemical is known, is the latest effort by Chinese companies to gain critical know-how on extracting oil and gas from shale rock formations so that they can unlock similar resources at home. Devon is one of the first companies to economically extract gas from shale fields - a lucrative new oil source.

As part of the investment, Sinopec will pay US$1.6 billion to drill wells in the five projects in Alabama, Ohio, Michigan and elsewhere, Devon said late on Tuesday.

Other Chinese state oil majors, and also European energy peers, have invested in North American shale. CNOOC Ltd, China's third-largest oil firm, has acquired stakes in several shale leases in Texas, Colorado and Wyoming in 2010 and 2011 from Chesapeake Energy Corp, which uses the Chinese funding to monetize its asset.

"Unlike companies like Chesapeake who need joint ventures to fund development activity, Devon isn't in dire need of the proceeds," Sanford C. Bernstein analysts said in a note, adding the deal allows Devon to seek exposure to new projects with less risk.

Sinopec's foray also underlines the ambitions of Chairman Fu Chengyu in overseas mergers and acquisitions. Fu, who formerly headed CNOOC, has led a spending spree on energy assets in countries from Australia to Brazil since he took the Sinopec job last year.

Fu was also behind CNOOC's 2005 bid to buy American oil producer Unocal Corp that failed after the US government blocked the transaction for political reasons.


Editor:Wang Xi |Source: People's Daily

Hot Videos view more

The celebrations are still continuing as the victorious coach, Joachim Loew, has been honored for his achievement in his hometown of Freiburg.
Germany coach Loew honored in hometown of Freiburg

Chinese men´s national team continued its preparations for next year´s Asian Cup, as they managed a one-all draw against visitors Jordan during a football friendly in Harbin, the capital city of Northeast China´s Heilongjiang Province.
China held to 1-1 draw by Jordan

The defending world champs came into the contest with a perfect 6-and-oh record, but they would be in for a tough first half before opening things up in the second.
USA beat Slovenia 119-76 in quarter-finals

Hot Stories more

UK authorities believe killer of James Foley is a British national

Across the UK the hunt is on for James Foley’s killer, who authorities believe is a British national. As Richard Bestic reports from London, Prime Minister David Cameron cut short his summer break to lead his government’s response.

Israeli war jets renews Gaza strike as truce talks stalled

Three Palestinians were killed and 40 others wounded in the intensive Israeli war jets´ airstrikes on the Gaza city on Tuesday night, shortly before an end of a 24-hour ceasefire in the Gaza Strip,

Missouri police arrest dozens after violent night

As the protests in the town of Ferguson, Missouri turned violent with police facing ´heavy gunfire´ from some ´criminal elements´, cops fired tear gas, stun grenades and arrested 31 demonstrators on Monday night.

Picture in news more

More Video News

Choose TV Program