China Set To Frack America In Shale Deal With Devon

via Christopher Helman, Forbes

Showing that it isn’t worried about the upswell of angst over hydraulic fracking technology, the Chinese government, through state-controlled Sinopec, today struck a deal with Devon Energy to buy into five prospective new exploration areas in the U.S.

The deal, which includes $900 million in cash upfront and a promise of $1.6 billion in the years ahead to cover drilling and development, gives the Chinese a 33% stake in five of Devon’s fields, and a front row seat to what is effectively the second wave of development of U.S. shale assets. The areas in question include the Tuscaloosa in Louisiana, the Niobrara in Colorado, the Mississippian in Devon’s home state of Oklahoma, the Utica in Ohio and the Michigan basin.

This isn’t the first time a Chinese company has bitten off a piece of shale — Cnooc has partnered with Chesapeake Energy in the Eagle Ford and Niobrara in recent years — but it is the first onshore U.S. foray for Sinopec.

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