Sinochem buys into Texas oil-shale field

Sinochem Group, China's biggest supplier of chemical products, has agreed to buy a 40 per cent stake in Texas oil-shale acreage from Pioneer Natural Resources for US$500 million.

It will also pay US$1.2 billion of Pioneer Natural's share of future drilling costs, the Dallas-based company said on Wednesday. Pioneer Natural will continue to operate the 83,800 net hectares in the Wolfcamp field.

Sinochem's move follows other deals in which Chinese buyers acquired stakes in US shale formations in exchange for funding drilling costs.

CNOOC agreed to pay as much as US$1.3 billion including drilling costs for an interest in Chesapeake Energy's Niobrara shale project in 2011, and China Petrochemical and Devon Energy agreed to a deal valued at as much as US$2.5 billion last year.

"This accelerated development will add significant production and reserves for Pioneer while enhancing shareholder value," said Scott Sheffield, chairman and chief executive of Pioneer Natural.

Pioneer Natural is also halting efforts to sell properties in the Barnett Shale because of low bids, the company said.