Oilfield services behemoth Halliburton Company (HAL) declared that it has entered into a deal with Petrotech (Xinjiang) Engineering Co Ltd. Petrotech is a subsidiary of SPT Energy Group Inc. – the China-based private firm that provides solutions to upstream companies to efficiently carry out their exploration and production activities.
Per the agreement, both companies will form a joint venture (JV) firm − Xinjiang HDTD Oilfield Services Co. Ltd. – that will conduct hydraulic fracturing and production enhancement operations to exploit tight oil and gas reserves in the Chinese province Xinjiang, which includes the Tarim oilfield. Halliburton will likely have 49.0% interest in Xinjiang HDTD, while SPT Energy − which has been operating the Tarim oilfield for 20 years − will hold the remaining 51.0%.
China’s move to develop unconventional reservoirs – mainly to extract tight oil and shale gas – has been encouraging many local companies to tie up with oilfield services firms worldwide to share their technologies and expertise.
The latest deal, which marks Halliburton’s first JV for fracking operations in China, follows the same strategy. A JV between Geneva, Switzerland based oilfield service provider Weatherford International plc (WFT) and China’s Sinopec Group is another prime example.
Halliburton stated that the Tarim oilfield will likely produce roughly 50 million tons of oil equivalent by 2025, while total output in the Xinjiang province is projected at 100 million tons of oil equivalent – roughly one third of the total production in China.
Houston, Texas-based Halliburton is one of the largest oilfield service providers in the world, offering a variety of equipment, maintenance and engineering and construction services to the energy, industrial, and government sectors. The company operates under two main segments: Completion and Production, and Drilling and Evaluation.
The company currently carries a Zacks Rank #2 (Buy), which implies that it is expected to outperform the broader U.S. market over the next one to three months.
One can also consider players in the oil field services space like C&J Energy Services Inc. (CJES) and Unit Corp. (UNT). Both the firms also carry a Zacks Rank #2.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment