China Goes Shopping for Shale in U.S., Canada

China's made news the last couple years pumping big money into North America's resurgent oil and gas business. And the man with the credit card says the country's state-owned oil companies aren't done shopping.

Deal Journal colleague Wayne Ma reports that China Petroleum and Chemical, better known as Sinopec, is in talks with U.S. and Canadian companies to buy more unconventional oil and gas assets.

Sinopec is diversifying from its traditional refining role under the leadership of Chairman Fu Chengyu. Mr. Fu pioneered China's push into North America's oil patch, negotiating a pair of joint ventures with U.S. natural gas giant Chesapeake Energy in 2010 when he was still the head of another Chinese state enterprise, Cnooc. Those deals, which were worth nearly $2.5 billion combined and gave Cnooc a minority interest in shale fields in Texas, Wyoming and Colorado.

Under Mr. Fu, Sinopec in January struck a similar deal with Chesapeake's cross-town rival Devon Energy that gave it a stake in oil fields in Ohio, Michigan and several other states in exchange for $2.5 billion.

Both Devon and Chesapeake are marketing similar deals, though Cheaspeake's divestiture plans maybe changing. And there's a multitude of smaller exploration and production companies, including Penn Virginia.and Ultra Petroleum, looking for investors to help them develop shale fields as slumping natural gas prices and the high costs of shale drilling pressure balance sheets.