The world’s biggest mining company – Anglo Australian Miner BHP Billiton, has agreed to buy shale gas assets worth $4.75 billion (£2.9 billion) from US firm Chesapeake Energy.
The acquisition of Chesapeake’s Fayetteville, Arkansas assets shows BHP’s commitment in to the rapidly expanding shale gas business. The gas field currently produces more than 400 million cubic feet of natural gases daily.
“This transaction marks BHP Billiton’s entry into the US shale gas business. The operated position we are obtaining will immediately make BHP Billiton a major North American shale gas producer”, said J. Michael Yeager – chief executive of BHP in a statement.
The company will fund the acquisition through its own ash reserves.
Shale gas is being seen as a great resource for future supplies and BHP is not the first energy company investing in these shale rock reserves.
PetroChina – the Chinese government controlled oil company, recently picked up a 50% stake in Cutbank Ridge run by Encana of Canada for $5.4 billion.
Higher energy prices and innovative newer cost-effective technologies have spurred recent activity in shale gas assets.
However, environmental groups accuse shale gas exploration companies of poisoning ground water tables and taking investments away from renewable energy technologies.