Sinopec and Weatherford are set to form a joint venture oilfield services firm, a move that could help Sinopec lead in tapping into the nation's potentially vast shale resources.
BEIJING, May 21 (Reuters) – Sinopec Group said it is forming a joint venture oilfield services company with U.S.-listed Weatherford International, a move that may give the Chinese state energy firm the lead in tapping the nation's potentially vast shale resources.
The joint entity, likely the largest of its kind in China, aims to marry Weatherford's technological and management know-how with the Chinese oil major's ability to expand its upstream business, including in the country's nascent shale gas sector, industry officials have said.
Reuters reported last August that the companies were in advanced discussions to establish such an operation.
China, widely thought to hold the world's largest technically recoverable shale gas resources, hopes to replicate the shale boom that has transformed the U.S. energy landscape, but it faces technological and environmental challenges due to complex geology, a high population density and water shortages.
That offers opportunities to service specialists such as the world's top four - Schlumberger, Halliburton, Baker Hughes and Weatherford, which is the smallest among them.
A commercial shale gas find announced by Sinopec Corp , a unit of Sinopec Group, earlier this year at Southwest China's Fuling area lifted hopes that China is near a breakthrough in unlocking the fuel.
That also put Sinopec in a leading position in developing the resource and forced its bigger domestic rival PetroChina to play catch-up to meet a national output target earlier thought to be over-ambitious.
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