People with knowledge of a possible joint venture between Sinopec Corp and Weatherford International told Reuters that the two firms are already in advanced talks. The two sources said that the Chinese and US-listed firms are talking about creating a joint oilfield service company. The joint venture seeks to capitalize on the Chinese market which is currently ranked as the top energy consumer worldwide. Sinopec needs the expertise of Weatherford International as the former is still a new player in the shale oil and gas sector.
China's shale resources are generally thought to be the largest globally, but various technological and environmental difficulties have prevented it operating full-scale. These challenges include the country's multifaceted geology, high population density, and water scarcity.
It was a year ago when Weatherford initiated talks with the Sinopec Oilfield Service Company for an alliance. The source also told Reuters that should the two firms come to an agreement, the Chinese firm would have a controlling stake in the joint venture company.
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