ConocoPhillips said PetroChina Co. will acquire an interest in two Western Australia exploration assets and the companies will jointly identify unconventional resource reserves in China.
As part of three deals that are pending government and partner approvals, PetroChina will acquire a 20% working interest in the Poseidon offshore discovery in the Browse Basin and 29% in the Goldwyer Shale in the onshore Canning Basin in Australia.
The companies will also jointly study the potential for unconventional resource development in the roughly 500,000-acre Neijiang-Dazu Shale Block in the Sichuan Basin in China. If technically and commercially viable, they will advance development under a production-sharing contract, which would be agreed upon during the study period.
"ConocoPhillips recognizes the Sichuan Basin as having some of the most prospective marine shales in China and looks forward to working with one of the world's leading energy companies," said Don Wallette, ConocoPhillip's executive vice president, commercial, business development and corporate planning.
The U.S. energy company was cleared last week to resume full operations at the Penglai 19-3 oilfield in China's northern Bohai Bay after being sanctioned by Beijing over oil spills in 2011. Its recent fourth-quarter earnings fell 58% as commodity prices fell and as the exploration-and-production company was hurt by lower average realized prices for oil and natural gas.
Meanwhile, in December, PetroChina said it agreed to buy BHP Billiton Ltd.'s stake in the planned Browse gas-export project in Western Australia for $1.63 billion in cash, leading Nomura analysts to say the state-backed oil company needs to take a "more disciplined approach" in its overseas acquisition strategy.
Copyright (c) 2012 Dow Jones & Company, Inc.
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