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Total seals US$2.3b JV deal with Chesapeake
By Marcel Michelson |
January 5, 2010, Tuesday
|
Print Edition
Print Edition
ENERGY giant Total is entering the United States shale gas sector to boost its position in unconventional energy with a US$2.25 billion deal that will see it enter a joint venture with Chesapeake Energy.
Total E&P USA Inc will take a 25 percent stake in Chesapeake's upstream Barnett Shale assets for US$800 million in cash, the groups said in statements yesterday.
Total will provide an additional US$1.45 billion by funding 60 percent of Chesapeake's share of drilling and completion expenditures until the end of 2012, according to Chesapeake.
The deal follows similar investments by European rivals in North American shale gas after gas prices fell sharply in the past one and a half years. Chesapeake has made similar tie-ups with BP and Statoil.
"Total is pleased to be making a strategically important move by entering into the US shale gas business with Chesapeake, the world's leading shale gas operator," Total CEOr Christophe de Margerie said in a statement.
"This joint venture will provide us with a solid position in an attractive long-term resource base under competitive terms," he said, adding that the deal provided another key support for Total to build its gas value chain position in the US, which is the world's largest liquid natural gas market.
Total said it was conscious of the environmental aspect linked to producing shale gas and has confidence in Chesapeake's capacity to contain the impact of the Barnett Shale gas operations on the environment and respect local and federal regulations and guidelines.
The assets subject to the joint venture include some 270,000 net acres of leasehold in the "Core and Tier 1 areas of the Barnett."
Total E&P USA Inc will take a 25 percent stake in Chesapeake's upstream Barnett Shale assets for US$800 million in cash, the groups said in statements yesterday.
Total will provide an additional US$1.45 billion by funding 60 percent of Chesapeake's share of drilling and completion expenditures until the end of 2012, according to Chesapeake.
The deal follows similar investments by European rivals in North American shale gas after gas prices fell sharply in the past one and a half years. Chesapeake has made similar tie-ups with BP and Statoil.
"Total is pleased to be making a strategically important move by entering into the US shale gas business with Chesapeake, the world's leading shale gas operator," Total CEOr Christophe de Margerie said in a statement.
"This joint venture will provide us with a solid position in an attractive long-term resource base under competitive terms," he said, adding that the deal provided another key support for Total to build its gas value chain position in the US, which is the world's largest liquid natural gas market.
Total said it was conscious of the environmental aspect linked to producing shale gas and has confidence in Chesapeake's capacity to contain the impact of the Barnett Shale gas operations on the environment and respect local and federal regulations and guidelines.
The assets subject to the joint venture include some 270,000 net acres of leasehold in the "Core and Tier 1 areas of the Barnett."
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