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Sinopec agrees 50 percent Chesapeake stake

Updated: 2013-02-26 11:01
By Du Juan ( China Daily)

China Petroleum and Chemical Corp, or Sinopec, the country's top refiner, has agreed to buy 50 percent of the US-based Chesapeake Energy Corp's Mississippi Lime oil and gas assets for $1.02 billion, the latest move by a Chinese oil company in North America.

Experts said it's important for China to improve its shale gas development technology and learn from the United States, which brought the shale gas revolution to the global energy industry.

"The investment scale of Sinopec this time is much smaller than the ($15.1 billlion) CNOOC-Nexen deal," said Liao Na, vice-president of ICIS C1 Energy, a Shanghai-based energy consultancy.

"However, the US has always been a market that Chinese companies want to tap."

He said the mature and regulated trading mode and management methods in the US are worth Chinese company's investment for further communication and cooperation.

As the second-largest natural gas developer, Chesapeake has become a leader in unconventional natural gas exploration in the US.

Chesapeake has about 2.1 million acres of leasehold in the Mississippi Lime region, where its production jumped 208 percent to an average of 32,500 barrels of oil equivalent per day in the fourth quarter, Reuters reported.

"It is a win-win cooperation between the two companies and will further expand Sinopec's oil and gas businesses in the US," the Chinese company told China Daily.