Sinopec to buy Chesapeake Energy oil and gas assets for US$1.02b

China Petroleum & Chemical (Sinopec), Asia's largest oil refiner, will buy half of Chesapeake Energy's Mississippi Lime oil and gas properties for US$1.02 billion, becoming the latest Chinese company to pick up shale assets in North America.

Output from shale fields in the United States and Canada has jumped over the past three years, thanks to the advent of drilling methods such as hydraulic fracturing, or fracking.

Companies in China, which has the largest shale reserves in the world, are keen to get the know-how of drilling in such unconventional fields.

State-owned CNOOC has struck a deal to buy Canadian oil and gas company Nexen for US$15.1 billion, while US company Pioneer Natural Resources said last month that it would sell a stake in its assets in the Wolfcamp shale field of Texas to Sinochem for US$1.7 billion.

Sinopec would get about 172,000 hectares in northern Oklahoma through the deal, it said in a joint statement with Chesapeake. A wholly owned unit, Sinopec International, will buy the Mississippi Lime assets.

Sinopec struck a deal with Devon Energy in January last year to buy a third of the US oil and gas producer's interest in five developing fields for about US$2.2 billion. A unit of Sinopec signed a contract to buy Canadian oil and gas explorer Daylight Energy for more than US$2 billion in October 2011.