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Sinopec buys 50% of Chesapeake assets for US$1b to tap US output
Source: Bloomberg News |
February 26, 2013, Tuesday
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Print Edition
Print Edition
CHINA Petrochemical Corp, the nation's second-largest energy company, will pay US$1.02 billion cash to buy 50 percent of Chesapeake Energy Corp's Mississippi Lime assets, seeking to tap surging US crude output.
The assets in Oklahoma produced 46,000 barrels of oil a day at the end of 2012, according to an e-mailed statement released yesterday by Beijing-based unit Sinopec International Petroleum Exploration and Production Corp. About 93 percent of the payment will be due on closing expected next quarter, Chesapeake, based in Oklahoma City, said yesterday in a statement.
Chinese companies may pursue more US energy acquisitions after CNOOC Ltd, a unit of China's largest offshore oil producer, this month won approval from the US Committee on Foreign Investment to buy Nexen Inc for US$15.1 billion. Chinese companies are seeking energy assets globally to lock in supplies for the world's fastest growing major economy and learn how to access technology to retrieve fuel trapped in rocks that has driven US oil production to the highest in almost 21 years.
"While Chesapeake has many quality assets, Chinese oil companies care more about their drilling and shale-fracking technology," said Laban Yu, a Hong Kong-based analyst at Jefferies Group Inc. "The reason Chinese oil companies have gone after Chesapeake in the past year was also because they wanted to apply the technology to tap the world's No.1 shale gas reserves in China."
CNOOC has bought US$1.65 billion of assets from Chesapeake since 2010.
Chesapeake reported on Thursday that Mississippian output had tripled in the fourth quarter from a year earlier. Net proved reserves were about 140 million barrels of oil equivalent as of December 31, the company said yesterday. Sinopec's purchase reflects 425,000 net acres, according to Chesapeake.
US oil output rose 54,000 barrels a day to 7.12 million in the week ended February 15, the highest since July 1992, the Energy Information Administration, a division of the Energy Department, said on Friday.
The assets in Oklahoma produced 46,000 barrels of oil a day at the end of 2012, according to an e-mailed statement released yesterday by Beijing-based unit Sinopec International Petroleum Exploration and Production Corp. About 93 percent of the payment will be due on closing expected next quarter, Chesapeake, based in Oklahoma City, said yesterday in a statement.
Chinese companies may pursue more US energy acquisitions after CNOOC Ltd, a unit of China's largest offshore oil producer, this month won approval from the US Committee on Foreign Investment to buy Nexen Inc for US$15.1 billion. Chinese companies are seeking energy assets globally to lock in supplies for the world's fastest growing major economy and learn how to access technology to retrieve fuel trapped in rocks that has driven US oil production to the highest in almost 21 years.
"While Chesapeake has many quality assets, Chinese oil companies care more about their drilling and shale-fracking technology," said Laban Yu, a Hong Kong-based analyst at Jefferies Group Inc. "The reason Chinese oil companies have gone after Chesapeake in the past year was also because they wanted to apply the technology to tap the world's No.1 shale gas reserves in China."
CNOOC has bought US$1.65 billion of assets from Chesapeake since 2010.
Chesapeake reported on Thursday that Mississippian output had tripled in the fourth quarter from a year earlier. Net proved reserves were about 140 million barrels of oil equivalent as of December 31, the company said yesterday. Sinopec's purchase reflects 425,000 net acres, according to Chesapeake.
US oil output rose 54,000 barrels a day to 7.12 million in the week ended February 15, the highest since July 1992, the Energy Information Administration, a division of the Energy Department, said on Friday.
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