Asia's largest refiner
) has announced that it has no concrete plan to establish an oil
service joint venture with Switzerland-based
Weatherford International Ltd.
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China, which presumably holds the largest shale resources, faces
various technological and environmental hindrances, from
operating at full capacity. The challenges comprise the country's
multifaceted geology, high population density and water scarcity.
With a view to tap the region's high potential of the region,
Weatherford began discussions with the Sinopec Oilfield Service
Company for an alliance, a new upstream service arm of the
Chinese energy giant, to explore the likelihood of a joint
venture, a year ago.
The alliance aimed to obtain Weatherford's technological know-how
and was expected to consist of integrated services from drilling
and well construction to well completion and equipment
manufacturing. The joint venture was anticipated to be announced
by late 2013 and was to be operated by the Chinese firm.
Although, Sinopec was seeking a partner for the development of
Chinese shale resources and had reached advanced talks with
Weatherford, it announced that no plan has yet been formalized.
Sinopec's goal to build on the success by extracting gas from
developing fields offers opportunities to other oil service
), Halliburton Co. (HAL) and
Baker Hughes Inc.
Recently, Sinopec came out with its first half results, which
improved on account of outstanding results in oil and gas
exploration on domestic growth in five key areas, including Tarim
Basin, the western rims of the Junngar Basin, the Ordos Basin,
the Sichuan Basin and the Xihu depression. The region holds
immense potential which will favor its earnings going forward.
Sinopec currently retains a Zacks Rank #3 (Hold).