China Oil Producer in U.S. Shale Deal

Monday, October 11, 2010 @ 01:10 PM gHale

China’s top offshore oil producer, CNOOC Ltd. will pay $1.1 billion to Chesapeake Energy Corp. for a piece if a U.S. shale oil and gas field.
China is making an aggressive push into the oil and gas industry as the 10 deals so far this year are worth $18.6 billion, jumping over the $15.8 billion in deals for all of 2009, according to Thomson Reuters data.
The Chesapeake agreement shows China is confident the purchase of a 33 percent stake in the Eagle Ford spot in South Texas will get the backing of U.S. regulators and politicians, who stepped in five years ago to block CNOOC’s bid to buy U.S.’ Unocal.
Shale gas accounts for 15-20 percent of U.S. gas production but could quadruple in coming years, touching off a scramble among producers such as Statoil, Exxon Mobil, Mitsui & Co and Royal Dutch Shell.
The Eagle Ford shale is attractive, officials said, because they feel it is rich in natural gas liquids and condensates, which command higher prices than regular natural gas.

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