Share “Wilmoth: Foreign partnerships benefit...”

Wilmoth: Foreign partnerships benefit domestic energy companies

As oil and natural gas producers throughout the United States continue to perfect drilling techniques in shale and other tight rocks, government-owned oil companies from China and other parts of the world are buying larger stakes in the American plays to gain better knowledge or the process.
by Adam Wilmoth Published: March 1, 2013
Advertisement

While the foreign investors stand to pocket a profit if the oil and natural gas fields produce as expected, what they're most interested in is knowledge.

With the fastest-growing economy in the world, China is immensely interested in creating its own shale oil and gas boom.

But first, it is learning from Chesapeake, Devon and other American companies.

Oppenheimer analyst Fadel Gheit described the strategy as “legalized industrial espionage.”

But unlike with illegal industrial espionage, there are no losers here.

The foreign companies pocket profits and knowledge.

The domestic companies are able to defer costs and speed up their drilling programs, increasing the royalties paid to mineral owners and taxes paid to state and local governments.

Another concern I've heard is that these joint ventures threaten energy independence.

Again, the produced oil and natural gas will stay here. Even if the effort to export liquefied natural gas takes off, exports will represent only a small portion of the country's natural gas production.

In the meantime, the foreign dollars will help increase domestic oil and natural gas production.

by Adam Wilmoth
Energy Editor
Adam Wilmoth returned to The Oklahoman as energy editor in 2012 after working for four years in public relations. He previously spent seven years as a business reporter at The Oklahoman, including five years covering the state's energy sector....
+ show more


Trending Now


AROUND THE WEB

  1. 1
    Matt Kemp's arthritic hips hold up deal with Padres
  2. 2
    This Incredible Dog Has A New Lease On Life Thanks To 3D Printing
  3. 3
    Another North Korea Casualty: Steve Carell Movie
  4. 4
    School Takes Blind Boy's Cane, Gives Foam Noodle
  5. 5
    Seth Rogen, James Franco discuss making 'The Interview'
+ show more