Once-Coveted Asian Oil Riches Take Backseat to U.S. Shale
Note from Christi:
Energy producers trade Asian oil-and-gas assets for greater investment in the North American shale revolution, as the US becomes the world’s top oil producer by 2017.
By: Ross Kelly, The Wall Street Journal
Once captivated by Asia’s untapped oil-and-gas riches, some midsize U.S. energy producers are now selling their Asian assets as the North American shale revolution offers bright prospects closer to home.
Companies such as Anadarko Petroleum Corp, Hess Corp and Newfield Exploration Co. recently started looking for buyers for either all or some of their Asian portfolios, together worth billions of dollars. Assets for sale include oil fields in China’s Bohai Bay and natural-gas hubs in Thailand.
Pulling back from Asia may appear counterintuitive. China’s energy demand alone will rise by 60% between 2010 and 2035, accounting for the largest share of growth in global energy use, according to the International Energy Agency.
But oil-and-gas producers now face more choices about where to drill. New technology that enables access to oil and natural gas trapped in dense rock formations is transforming global energy markets. The U.S. is expected to become the world’s top oil producer by 2017, the IEA said last year. And oil and gas extracted from shale is expected to account for around one-third of U.S. output by 2020, according to PFC Energy, a Washington-based consultancy.
With oil prices still relatively high amid declines in other commodities, the prospect of surging output in the U.S. is proving attractive to producers.
Continue to read the full article here.