Halliburton Company (HAL), Schlumberger Limited. (SLB): Can China Join the Fracking Game?

Opportunities for oilfield services firms
Not surprisingly, Halliburton Company (NYSE:HAL) and other major energy companies view Chinese shale gas development as a significant opportunity for future growth. Many of them, including Baker Hughes Incorporated (NYSE:BHI), ConocoPhillips (NYSE:COP), and Schlumberger Limited. (NYSE:SLB), have already developed strategic relationships with Chinese firms to better evaluate the nation’s shale gas potential.

Last December, Baker Hughes Incorporated (NYSE:BHI) joined forces with Honghua Group, China’s largest oil-drilling equipment exporter, to provide oilfield services and conduct research on China’s shale gas prospects, while Schlumberger Limited. (NYSE:SLB) purchased a roughly 20% stake in China’s Anton Oilfield Services Group, solidifying an existing cooperation agreement between the two companies to develop drilling fluids and well-cementing services.

Meanwhile, ConocoPhillips (NYSE:COP), an integrated oil company, is working with Sinopec to study shale development in China’s Qijiang block, an area thought to contain large quantities of shale gas, and plans to conduct two-dimensional seismic surveys and drill two wells in the block.

The bottom line
Though China’s shale gas industry is still stuck in an early developmental stage, a number of U.S.-based energy companies are enthusiastic about the nation’s shale prospects. As an additional catalyst, China’s Ministry of Finance said last November that it would provide shale drillers a sizable subsidy per cubic meter of gas sold.

Given the high level of service intensity required in exploiting China’s shale reserves, top-notch services firms such as Halliburton Company (NYSE:HAL) and Schlumberger Limited. (NYSE:SLB) are sure to benefit from the expected acceleration in Chinese drilling activity over the next several years.

The article Can China Join the Fracking Game? originally appeared on Fool.com and is written by Arjun Sreekumar.

Fool contributor Arjun Sreekumar has no position in any stocks mentioned. The Motley Fool recommends Halliburton.

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