Understanding China, One Blog at a Time

An American in China

The Fat Lady is Singing- China is Buying US Gas Leases

Posted by w_thames_the_d on January 31, 2011


Read it and weep…

exceprt:

“SHANGHAI (Dow Jones)–China’s Cnooc Ltd. (CEO) is buying into several shale oil and gas leases in the U.S. owned by Chesapeake Energy Corp. (CHK) for US$570 million in cash, in the latest move by a Chinese oil company to learn a technology that has transformed the U.S. gas industry.

Also, Cnooc will fund two-thirds of Chesapeake’s share of drilling and other costs up to maximum of US$697 million, the two companies said in a statement Monday.

The deal follows a similar Cnooc-Chesapeake agreement in October 2010 under which the Chinese company bought one-third of Chesapeake’s 600,000-acre Eagle Ford, Texas, shale oil and gas project for US$1.08 billion–a pact which was the first major investment by a China state-run company in onshore energy reserves in the U.S.

Chinese companies had until then been reluctant to invest in U.S. energy reserves, following Cnooc’s 2005 bid to take over California-based Unocal Corp. being blocked by a nationalist political uproar.

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