Chesapeake Energy, the second largest natural gas producer in the US is in trouble, and must sell billions of dollars worth of assets if it hopes to avoid defaulting on its loans; an act that looks unlikely to happen soon enough.
Luckily for Chesapeake, Sinopec has large ambitions which could come to their aid. The Chinese energy company is considering buying into Chesapeake as part of its bid to grow its global market presence and diversify from the refining and distribution end of the market, where it is fed up of having to weather hits from CNOOC, CNPC, and PetroChina. Sinopec have plans to operate in all parts of the supply chain in order to balance their own portfolio, and already hold positions in Gabon, Sudan, and Ethiopia, although they have also been looking to enter more mature markets, especially in Canada.
Unfortunately for Chesapeake, Sinopec is not nearly as wealthy as CNPC, CNOOC, or PetroChina, however if they receive extra funding from the Chinese state, Sinopec could prove to be a lifesaver for Chesapeake as it looks to focus on unconventional oil and gas in order to increase its knowledge and knowhow for use domestically in China where it estimated that fields could hold 60 billion cubic metres.
By. Joao Peixe of Oilprice.com
Joao is a writer for Oilprice.com More