Sinopec snaps up a stake in Chesapeake

City A.M. Reporter
CHINA Petroleum & Chemical Corp (Sinopec) is set to buy half of Chesapeake Energy’s Mississippi Lime oil and gas properties in Oklahoma for $1.02bn (£672m) to increase its presence in the booming North American shale gas industry.

Output from shale fields in the United States and Canada has jumped over the last three years due to the advent of drilling methods such as hydraulic fracturing. Chinese companies are keen to increase their experience in drilling in such unconventional fields.

Sinopec, which is Asia’s largest oil refiner, is buying 850,000 acres. The Mississippi Lime assets will be purchased by Sinopec International.

Chesapeake, the second-largest gas producer in the United States, will use the money to cut down its debt, which stood at $12bn at the end of last year. The firm, which closed $12bn of asset sales last year, is aiming for sales of $4–7bn in 2013.