Chesapeake Energy (NYSE: CHK) will get $2.2 billion from The China National Offshore Oil Corp. (CNOOC) in exchange for a one-third interest in the Eagle Ford Shale oil and natural gas project in South Texas. CNOOC and will pay billions more for development costs year after year.
Chesapeake Energy says it will help speed development of resources on the 600,000 acres that it owns. The project could help keep natural gas prices low and boost production of domestic U.S. oil resources.
"They're providing the capital and we're providing the expertise and assets," said Aubrey K. McClendon, Chesapeake's CEO, in an interview, "The output will be the development of American assets, less U.S. dependence on foreign oil and the creation of 20,000 jobs and tax revenues for all levels of government."
Although the United States has refused to adopt natural gas as a fuel for the future, large investments worldwide have come pouring in for a stake in the commodity as it offers better environmental and economic prospects than oil.
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