GOOD READS

Sinopec, Conoco Shale Gas Venture

RELATED QUOTES

SymbolPriceChange
BP48.88+0.49
DVN70.70+0.84
CVX123.68+1.85
SNP90.47+0.59
TOT68.08+0.31

China Petroleum and Chemical Corporation (SNP aka Sinopec) has inked an agreement with the U.S. energy company ConocoPhillips (COP) to conduct a joint unconventional oil and gas development study. Although the financial details were not disclosed, this collaboration between the two groups is expected to last for two years.

The deal calls for the fifth-largest oil company in the world, Sinopec, to carry out the research program through its affiliate − Sinopec Exploration Southern Company − to explore, develop and produce shale gas in association with ConocoPhillips' China. The companies will perform their activities in the shale gas rich Qijiang block in the Sichuan basin.

ConocoPhillips will conduct the two-dimensional seismic surveys and drill two wells in a portion of the block spanning 1,513 square miles. Its initiative to explore shale gas in China marks the entry of the third international oil giant, with the others being Royal Dutch Shell Plc (RDS.A) and Chevron Corp. (
CVX). Other overseas oil majors like BP Plc (BP) and Total SA (TOT) are also keen on similar agreements, but are yet to announce any contract.

In recent times, Texas-based energy major ConocoPhillips has shown keenness to enter the Chinese market, with a special focus on the shale sector. Its effort of boosting commercial shale gas output in China will assist the country in meeting its targeted shale gas output of 6.5 billion cubic meters annually by 2015 and 100 billion cubic meters by 2020. In 2011, China did not produce any commercial gas.

China is estimated to hold recoverable shale gas of about 1,275 trillion cubic feet in just two basins, as per the US Energy Information Administration. This actually overshadows the combined reserves in the U.S. and Canada. China primarily intends to lure U.S companies to share their experience in drilling for shale as they lack the expertise in developing shale reserves. This will help it reach its target for 2015. However, the target looks too challenging to be fully accomplished in the current scenario within 2015.

In view of gaining shale-gas know-how, Sinopec completed a $2.44 billion acquisition deal earlier this year for minority stakes in five of Devon Energy Corporation’s (DVN) U.S. shale oil and gas fields.

Both Sinopec and ConocoPhillips hold a Zacks #3 Rank (short-term Hold rating). Longer term, we maintain our Neutral recommendation for the companies.
 

Read the Full Research Report on BP

Read the Full Research Report on DVN

Read the Full Research Report on CVX

Read the Full Research Report on SNP

Read the Full Research Report on TOT

Read the Full Research Report on COP

Read the Full Research Report on RDS.A

Zacks Investment Research



More From Zacks.com

Quiz: How well do you know India's economy?

Question 1

Which of these products is India the world's largest producer of?

Poll Choice Options
  • Wheat
  • Rice
  • Milk
1
2
3
4
5
6
7
8
9
10

Latest News

  • Gold falls to 2-1/2 week low in thin trade

    Gold fell to a two-and-a-half-week low in choppy and thin holiday trade on Monday, hurt by sharp outflows from the world's biggest bullion-backed exchange-traded fund (ETF) and a stronger dollar. Spot gold fell to a two-and-a-half-week low of $1,281.40, before pruning the losses to trade down 0.6 percent at $1,286.30 by 0641 GMT. "One aspect is that the market is pretty thin today and liquidity is going to be constrained," said Victor Thianpiriya, an analyst at ANZ. SPDR Gold Trust, the …

  • Separatist shutdown partially affects life in Srinagar

    Srinagar, April 21 (IANS) A separatist called shutdown partially affected life in Jammu and Kashmir summer capital Srinagar on Monday. Private transport, government offices, banks and post offices functioned ... …

  • Japan exports growth slows sharply, keeps pressure on BOJ to act

    Japan suffered its worst annual trade deficit in March as exports growth slowed to its weakest in a year, suggesting a rapid loss of economic momentum that may prompt policy makers into early action as a national sales tax hike puts more strain on growth. The Bank of Japan has repeatedly ruled out fresh easing measures in the near term, insisting that the economy is on track to meet its 2 percent inflation target even as recent soft data hit investor confidence. However, the double-whammy of …

  • Nikkei ends flat, profit-taking erases gains after two-week high
    Nikkei ends flat, profit-taking erases gains after two-week high

    Japanese shares climbed to a two-week high on Monday before giving up gains to end flat in thin trading due to the Easter holidays, while nonbank lenders surged on a media report the government is considering ... …

  • Sensex gains 73 points during pre-noon session

    Mumbai, April 21 (IANS) A benchmark index of Indian equities markets gained 73.03 points or 0.32 percent during the pre-noon trade Monday. Good buying was seen in capital goods, auto, metal and banking ... …

IN-DEPTH ANALYSIS & INTERVIEWS

  • This might well be India’s biggest Ponzi scam

    It was just too good to be true. Ashok Khital, 45, displays every symptom of a man who knows he's been conned. …

  • India's star studded football league

    High and mighty including Sachin, Salman & Sun Group buy ISL teams …

  • Leaderspeak with Rajesh Janey

    Rajesh Janey, President - India & SAARC, EMC shares many firsts in his life. …

  • Seed of Doubt

    Field trials have been allowed again in India. But two decades after their global launch, genetically modified (GM) crops remain controversial. …

  • Power Hungry

    Gujarat has power round-the-clock. Most other states do not. Why this will matter in the general elections. …

  • Etcetera

    The most keenly watched contest of the current general election will be the one for the Varanasi parliamentary seat, where the Bharatiya Janata Party's prime ministerial hopeful Narendra Modi squares off ... …

  • Economy vs Democracy

    As the country gets election fever, cash comes out of mattresses and turns into liquor, gifts, and food. But it is not bad for the health of the economy, reports Sarika Malhotra from the trenches. …

MARKET MOVERS

  • Most Actives
    Most Actives
    NamePriceChange% Chg
    53.50+5.85+12.28%
    HCLINFO.BO
    16.14-0.38-2.30%
    UNITECH.BO
    13.67+0.31+2.32%
    SUZLON.BO
    74.50+3.45+4.86%
    STAMPEDE.BO
    15.83+1.00+6.74%
    IVRCLLTD.BO
  • Price % Gainers
    Price % Gainers
    NamePriceChange% Chg
    105.30+17.55+20.00%
    SHASUNPHA.BO
    15.51+2.58+19.95%
    HIMIN.BO
    19.85+3.30+19.94%
    ORIENTP.BO
    246.00+29.85+13.81%
    RANEMADRAS.BO
    37.00+4.55+14.02%
    KWALITYLTD.BO
  • Price % Losers
    Price % Losers
    NamePriceChange% Chg
    -11.50-100.00%
    4THGEN.BO
    -17.30-100.00%
    ALFAICA.BO
    -15.25-100.00%
    AMAL.BO
    -10.65-100.00%
    BORAX.BO
    -31.00-100.00%
    BRADYM.BO
  •  
    Recent Quotes
    Symbol Price Change % ChgChart 
    Your most recently viewed tickers will automatically show up here if you type a ticker in the "Enter symbol/company" at the bottom of this module.
    You need to enable your browser cookies to view your most recent quotes.
  • Recent Quotes News

    •  
      Sign-in to view quotes in your portfolios.