2 Foreign Firms Invest In U.S. Energy Sector
LINDA WERTHEIMER, HOST:
Two foreign companies - one from France and one from China - yesterday announced major investments in the U.S. energy industry. The deals are a sign of how hydraulic fracturing technology - also known as fracking - is attracting interest in U.S. oil and gas production.
NPR's Jim Zarroli reports.
JIM ZARROLI, BYLINE: The Chinese company Sinopec will invest $2.2 billion into a joint venture with Devon Energy Corporation of Oklahoma City. The deal will give Sinopec a partial interest in five oil and gas fields, although Devon will remain the operator of the fields. At the same time, the French company Total will invest $2.3 billion with Chesapeake Energy, the second such deal between the two companies. Energy producers have been rushing to buy up oil and gas fields in states such as Ohio, Pennsylvania and Texas. This is partly because of the growth of fracking - a controversial practice that enables producers to extract more oil and gas by cracking open underground shale rock formations.
But the technology is very expensive. To raise the capital they need, U.S. companies have been searching for investors. Chesapeake Energy said recently that it was looking for a partner to help it develop a major field in Ohio. Meanwhile, Sinopec has been investing in energy projects all over the world; in places such as Australia, Brazil and Indonesia. But the company's announcement that it is investing in U.S. energy projects yesterday came as something of a surprise in the energy sector.
Jim Zarroli, NPR News, New York.
NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.