Sinopec to buy stake in Chesapeake assets for $1.02 billion

OKLAHOMA CITY, Okla., Mon Feb 25, 2013 — China Petroleum & Chemical Corp. (Sinopec), Asia’s largest oil refiner, will buy half of Chesapeake Energy Corp.’s Mississippi Lime oil and gas properties for $1.02 billion, becoming the latest Chinese company to pick up shale assets in North America.

Chesapeake shares were up 2 percent at $20.90 in premarket trading on Monday. The stock has risen about 23 percent this year.

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.

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.

China’s state-owned CNOOC Ltd. has struck a deal to buy Canadian oil and gas company Nexen Inc. for $15.1 billion, while U.S. company Pioneer Natural Resources Co. said last month it would sell a stake in its assets in the Wolfcamp shale field of Texas to Sinochem Group for $1.7 billion.

Sinopec will get 425,000 acres in northern Oklahoma through the deal, Sinopec and Chesapeake said in a statement.

The Mississippi Lime assets will be bought by Sinopec International.