BEIJING, April 28 (Xinhua) -- China Petrochemical Corp. (Sinopec), the country's second-largest oil producer, said Saturday that it has completed the acquisition of one-third of the equity of Devon Energy Corp's five shale gas assets in the United States.
The acquisition cost Sinopec a total of nearly 2.44 billion U.S. dollars. The five shale gas blocks owned by Devon are Niobrara, Mississippian, Ohio Utica Shale, the Michigan Basin and Tuscaloosa Marine Shale, Sinopec said in a statement on its website.
The acquisition is Sinopec's first attempt to enter the oil and gas exploration and development business in the U.S.
The move will enable Sinopec to capitalize on Devon's proficiency in producing oil and gas from shale and other unconventional basins, as part of China's drive to develop clean energy, analysts said.
Sinopec has made a 732-million-U.S. dollar cash payment and will pay the remainder in the form of a drilling carry. The entire 1.71-billion-U.S. dollar carry will be realized by the end of 2014, according to Sinopec's statement.
Drilling carry is an accounting arrangement used in energy joint ventures, which means, in this case, that Sinopec will finance the drilling expenses of Devon during a defined period.