CNOOC dips its toe in US waters with £2.2bn deal

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The China National Offshore Oil Corporation (CNOOC) is making its first tentative investment in the US, five years after dropping a $18bn (£11bn) bid for Unocal that caused a protectionist hue and cry among American politicians.

In a deal announced yesterday, CNOOC will pay $2.2bn for a minority stake in a single oil and gas field in Texas – the Eagle Ford Shale project owned by Chesapeake Energy.

Aubrey McClendon, Chesapeake's chief executive, stressed the benefits of Chinese inward investment and said his company would still be the sole operator of the project. "This transaction will provide the capital necessary to accelerate drilling of this large domestic oil and natural gas resource, resulting in a reduction of our country's oil imports over time, the creation of thousands of high-paying jobs in the US and in the payment of very significant local, state and federal taxes," he said.

When CNOOC made a bid for Unocal in 2005, the US House of Representatives voted that it be referred to the then president, George Bush, on national security grounds. The Chinese company withdrew the offer, and Unocal is now owned by Chevron.

Since then, Chinese oil and gas companies have largely confined their investments to developing areas such as Africa, but yesterday's Chesapeake deal suggests a willingness to return tentatively to the US – despite escalating anti-China rhetoric from US politicians ahead of the midterm elections. "Ninety-five per cent of the world's exploration and production companies are in North America," said an Asia-based investment banker who has advised Chinese oil firms on outbound deals. "If you have to move the reserve needle, you have to buy US companies."

The deal also reflects the growing interest in oil and gas reserves trapped in shale rock formations. Analysts believe they could hold enough natural gas to satisfy US demand for a decade.