Sinopec, the Chinese state-owned oil and gas group, will pay $1bn for a 50 per cent stake in Chesapeake Energy’s Mississippi Lime oil and gasfield.
The joint venture represents Sinopec’s second step into unconventional US oil and gas, following its $2.2bn purchase of stakes in five Devon Energy properties last year.
It is the latest example of a buying spree by Chinese oil and gas companies, which the International Energy Agency forecast last week will lead to state-owned groups producing 3m barrels of oil a day outside of China by 2015, more than the current production of Kuwait.
Chesapeake, the second largest natural gas producer in the US, has been looking to sell part of its Mississippi Lime property for at least a year as it seeks to pay down debt and counter the effect of low US natural gas prices.
“Chinese companies are seeking to buy international oil assets and the US stands out as one of the few places where you can do that at scale,” said Colin Smith, an analyst at VTB Capital.
“As long as you are a minority partner, US regulators seem to be fairly relaxed about Chinese companies buying stakes,” he added.
Spending on international oil and gas acquisitions by Chinese state-owned oil and gas companies hit a record $35bn last year, including deals such as Cnooc’s $18bn bid for Nexen of Canada.
Unlike Cnooc’s takeover of Nexen, Sinopec is entering a joint venture. Chesapeake will retain operational control of the Mississippi Lime field, in the US states of Oklahoma and Kansas.
The transaction, worth $1.02bn in total, was announced by Sinopec International Petroleum Exploration and Production Corporation (SIPC), part of the wholly state-owned parent group.
Sinopec’s overseas assets, which range from Argentina to Australia, are almost all owned by the parent company. Sinopec also has a partially listed subsidiary, which holds most of the companies’ domestic businesses, and is expected to purchase part of the parent group’s overseas assets over time.
Chesapeake reported last week an 87 per cent drop in its underlying earnings for 2012, as rising oil production failed to compensate fully for the fall in the price of natural gas.
The company plans $4bn-$7bn of disposals in 2013, down from almost $12bn last year, as it seeks to pay down some of the $12.3bn of net debt it held at the end of 2012.