Sinopec, Total pour $4.5 billion into U.S. shale

Tue Jan 3, 2012 3:58pm EST
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By Matt Daily and Anna Driver

(Reuters) - China's Sinopec (600028.SS: Quote) and France's Total SA (TOTF.PA: Quote) made major purchases into the U.S. energy sector on Tuesday, pouring $4.5 billion into deals to buy into booming production from shale rock formations.

The ventures showed that the global appetite for U.S. energy assets remained strong, with foreign oil and gas producers eager to invest in several of the mostly undeveloped fields that are believed to hold billions of cubic feet of natural gas and liquids.

Sinopec's Sinopec International Petroleum Exploration & Production Corp made its first foray into U.S. shale with a $2.2 billion investment to create a joint venture with Devon Energy Corp (DVN.N: Quote).

That gives Sinopec a one-third interest in five fields, while Total's $2.3 billion deal with Chesapeake Energy (CHK.N: Quote) is its second joint shale venture with the U.S. company.

Those deals sent the shares of Devon and Chesapeake higher and could be among the first in another busy year in the market for energy assets following the estimated $473 billion in transactions completed in 2011, according to Thomson Reuters data compiled through mid-December.

Chinese companies have been among the most aggressive, targeting assets around the globe, as well as in North America, where offshore oil company CNOOC Ltd (0883.HK: Quote) formed a partnership with Canada's Nexen Inc NXY.TO and bought a $2 billion stake in oil sands property Opti Canada Ltd.

That followed PetroChina's (601857.SS: Quote) $1.7 billion investment in Chesapeake's shale properties.

Those partnerships and investments have drawn little controversy in the United States, a marked change from the political backlash that CNOOC's proposed full takeover of Unocal   Continued...