CNOOC tests US with $1.1 billion bid: Report

09:14, October 12, 2010      
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China's offshore oil producer CNOOC agreed to pay $1.1 billion for a minority stake in a U.S. shale oil and gas field, testing the U.S. market for the first time since its 2005 failed bid for Unocal.
The Chesapeake agreement shows that the Chinese company is confident that the purchase of a 33 percent stake in the Eagle Ford acreage in southern Texas will get the backing of U.S. regulators and politicians, who stepped in five years ago to block CNOOC's bid to buy U.S. oil company Unocal, The Reuters reported Monday.
By working with Chesapeake, which would remain the operator of the project, the deal could help CNOOC gain exposure to the complicated shale-gas extraction technology that it still lacks, The Reuter reported.
CNOOC agreed to fund 75 percent of Chesapeake's share of drilling and completion costs until an additional $1.08 billion has been paid, which Chesapeake expects by year-end 2012, the companies said. The transaction is expected to close in the fourth quarter.
"Partnering with Chesapeake on this project to develop shale oil and natural gas jointly ... satisfies the spirit of Sino-U.S. cooperation in the energy sector," CNOOC Chairman Fu Chengyu said in a statement.
CNOOC came in with negotiations with Chesapeake after the talks with Indian energy company Reliance Industries and Chesapeake collapsed last week.
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