Monday, April 15, 2013

US Tight Oil and Gas: Foreign Investment

Much investment in US tight oil and gas plays has come from abroad (20% of total from 2008-2012), notably China.  The Energy Information Administration (EIA) put out a new article on this subject.  Demand is so great for Bakken oil that much of it is not transported by pipeline but instead by rail and barge.

From the EIA:
In early 2013, Sinochem, a Chinese company, entered into a $1.7 billion joint venture with Pioneer Natural Resources to acquire a stake in the Wolfcamp Shale play in West Texas. This investment highlights a renewed trend toward foreign joint ventures. Since 2008, foreign companies have entered into 21 joint ventures with U.S. acreage holders and operators, investing more than $26 billion in tight oil and shale gas plays. 

Investment in shale plays in the United States totaled $133.7 billion between 2008 and 2012, as part of 73 deals. Joint ventures by foreign companies accounted for 20% of these investments. The rest of the investments were either part of outright acquisitions—such as the Australian BHP Billiton oil company's acquisition of Petrohawk Energy Corp.—or were joint ventures among American companies (such as Hess and Noble Energy with Consol Energy) and financial institutions.
China is expected to become the world's largest oil importer by 2014. China is already the largest consumer, producer and importer of coal.

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