Tuesday, June 21, 2011

Shale Gas - Chinese Buy into South Texas Oil & Gas Field

Welcome to the Collaborative Revolution!

There are some very interesting economics at play in the Eagle Ford Shale play unfolding in South Texas.  The article linked below describes a deal between China's CNOOC and Chesapeake Energy, an early player in Shale gas plays around the country.  Chesapeake gobbled up thousdands of oil and gas leases bu needs capital to develop those leases in a timely manner.

Enter CNOOC a company owned by the Chines government.  As the article from the San Antonio Express explains:

"From the Chinese perspective, this is a golden opportunity for them. They have identified shale resources in China, but they don't have the knowledge or technical expertise to go after those resources," said Ken Medlock, a fellow at Houston's Baker Institute and adjunct professor in Rice University's economics department.
McClendon disputed that notion, saying hydraulic fracturing is now "off-the-shelf technology" available to anyone.
Also underlying the move is China's need to find new energy sources and the technology to develop them to feed its expansive economic growth.

Energy consumption in the world's most populous nation has doubled in less than a decade, and the International Energy Agency reported in July that China surpassed the U.S. in total energy used in 2009.
China has increasingly been looking to the Americas for raw materials it needs to sustain the boom. As private investment dwindled with the global financial crisis, the cash-flush Chinese went on a regional shopping spree.

SA Express Article

James L. Salmon, Esq.
Collaborative Construction
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Sustainable Land Development International

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