October 10, 2013

Foreign companies invest in US shale boom

The U.S. shale gas boom has not only drawn domestic energy explorers but has also caught the attention of numerous companies abroad

The U.S. shale gas boom has not only drawn domestic energy explorers but has also caught the attention of numerous companies abroad.

For instance, PTT Exploration & Production PCL, a petroleum company from Thailand, is considering investing in North American shale gas to help boost its output by the end of the decade, The Wall Street Journal recently reported.

PTT is looking to foreign gas sources to respond to growing energy consumption in Thailand, where opportunities for energy production are limited, the source said.

“We intend to look for producing assets which can contribute production and reserves in short term and medium term,” Tevin Vongvanich, chief executive of PTT told the source. “The assets we are targeting should strategically fit our growth areas. It will be nice if it can contribute liquefied natural gas to Thailand.”

With the continued success of U.S. shale gas production, the country's first LNG facilities are being built and some analysts expect the country to begin exporting LNG in 2015, the WSJ reported.

Other companies eye U.S. shale

About 20 percent of the investments made into U.S. shale and gas development between 2008 and 2012 have been from foreign countries, the Energy Information Administration reported earlier this year. China has proven to be a major investor, with Chinese companies investing $5.5 billion into U.S. energy exploration, The Motley Fool reported.

CNOOC, for example, partnered with U.S. company Chesapeake Energy in 2010 on its Eagle Ford assets. Sinopec, another Chinese oil company, teamed up with Devon Energy, buying a third of Devon's equity in five U.S. shale fields, the source said. In Exchange, Sinopec is paying $1.6 billion for Devon's drilling expenses in the fields, which includes the Niobrara and Utica shale formations.

Companies in Japan have also invested $5.3 billion in U.S. shale oil and gas production. Indian companies invested $3.55 billion, The Motley Fool reported. Companies in Korea, France and Norway have also poured billions into shale production in the United States.

India's Reliance Industries Limited announced in July it would invest an additional $5.1 billion in its U.S. shale gas business - taking its total investments in the U.S. to $10.8 billion, the Business Standard reported.

“RIL has emerged as a serious shale gas player,” Niraj Mansingka and Kiran Tulasi of Edelweiss Securities wrote in a report. “We expect RIL to spend another $5.1 billion during calendar years 2013-2016 and the joint ventures will drill 3,846 wells during the life of the project against 514 drilled till 2012-end.”

RIL's joint ventures in the United States include those with Chevron Corp, Pioneer Natural Resources and Carrizo Oil and Gas Inc, according to the Business Standard.

Broadwind Energy's gears and gearboxes are found in frac pump drives. Fracking provides access to hard rock shale formations and produces significant amounts of oil and gas. Broadwind provides a variety of precision gears and gearboxes, including Gleason spiral bevel gears, to help enable a promising domestic energy future in the U.S.