Devon Energy has raised $900 million in cash from Sinopec Group for a stake in Devon shale gas plays. These gas projects include the Utica, Niobrara, and Tuscaloosa formations. 

What is interesting is not so much that China has bought its way into the extraction of a resource that the USA has in some abundance. What is more troubling is that China has bought its way up the learning curve in horizontal drilling and fracturing. 

According to the article in Bloomburg Businessweek-

China National Petroleum Corp., Sinopec Group and Cnooc Ltd. are seeking to gain technology through partnerships in order to develop China’s shale reserves, estimated to be larger than those in the U.S.

“In these joint ventures, the partner does typically get some education on drilling,” Scott Hanold, a Minneapolis-based analyst for RBC Capital Markets, said today in an interview.

So, the business wizards at Devon in OKC have arranged to sell their drilling magic to the Sinopec for a short term gain on drilling activity. Way to go folks. Gas in the ground is money in the bank. These geniuses have arranged to suck non-renewable energy out of the ground as fast as possible.  Once again US technology (IP, which is national treasure) is piped across the Pacific to people who will eventually use it to beat us in the market.  Score another triumph for our business leaders!!

The market is like a stomach. It has no brain. It only knows that it wants MORE.    Th’ Gaussling.

 It’s a banner day for American Business.

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