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• Asian and European energy producers are spending billions of dollars to amass stakes in oil and natural-gas discoveries from Ohio to British Columbia even as earthquakes and tainted water threaten to stall the biggest drilling boom in at least two decades.Total, Europe’s third-largest oil company, and China Petrochemical, that nation’s second-biggest crude producer, committed $7 billion to US and Canadian shale rock formations during the past two weeks. The investments are aimed at tapping the expertise of smaller explorers including Devon Energy (DVN) and Chesapeake Energy (CHK) that pioneered techniques employed to crack previously impervious shale.

• The potential rewards from shale regions such as the Utica and Marcellus formations in the eastern U.S. are too big for overseas explorers to ignore, said Mark Hanson, an analyst at Morningstar in Chicago. A New Year’s Eve earthquake in Youngstown, Ohio, linked to a well used to store drilling wastewater prompted the state to halt operations at five such wells. Separately, the US Environmental Protection Agency is studying whether intensive shale-drilling practices pose a danger to drinking water.

• “These shale prospects are exploration frontiers and the big international players see them as a runway to growth,” Hanson said on Tuesday. “They are acquiring stakes not only to learn how to drill these kind of formations in other parts of the world, but to understand how to get their arms around prospects of this size.”

• Reliance, BHP,Shale acquisitions helped push overseas offers for US oil and gas fields to $51 billion last year, the most in at least 12 years, according to data compiled by Bloomberg. Melbourne-based BHP Billiton led purchases in 2011 with the $12.1-billion takeover of Petrohawk Energy.

• India’s Reliance Industries (RIL) and Apollo Global Management were on Wednesday named by people with knowledge of the matter as being among companies in talks to buy El Paso Corp’s oil and gas exploration and production unit. The unit, whose assets include more than half a million acres of shale fields, may be worth about $8.1 billion, analysts at BNP Paribas estimated in November.

• Sinopec Group, Devon.China Petrochemical, known as Sinopec Group, on Wednesday agreed to buy a one-third stake in five Devon exploratory oil projects in the US for $900 million. The company also will provide as much as $1.6 billion to cover Devon’s future drilling costs.The deal followed Sinopec Group’s C$2.2-billion ($2.16 billion) acquisition of Daylight Energy on December 23 to get access to the Calgary-based company’s gas and oil projects in western Canada.

• Sinopec Group and domestic rivals China National Petroleum and Cnooc are seeking to learn how to tap shale formations at home that the US Energy Information Agency estimates may hold 1,275 trillion cubic feet of gas, or 12 times China’s so-called conventional deposits.

Shale concern

• Total agreed to pay $2.32 billion on Wednesday for a 25% stake in 6,19,000 acres in a section of the Utica shale rich in butane and propane that sell at a premium to gas. Chesapeake will receive $2.03 billion and EnerVest will get $290 million.Total has been a partner with Chesapeake in another shale formation, the Barnett, near Fort Worth, Texas, since 2010. The company plans to transfer what it learns about cracking dense shale from Chesapeake’s experts to shale prospects in Africa, Latin America, Australia and Europe.

• Drilling into shale rock to extract gas and crude has come under fire from federal regulators, state lawmakers and environmental groups concerned that the practice may contaminate drinking water. Shale rock was considered too hard to drill until the 1990s, when new methods for boring horizontal wells were combined with hydraulic fracturing, which involves pumping millions of gallons of high-pressure water laced with chemicals and sand underground.The number of rigs drilling horizontal wells in the US surged 23% in 2011, reaching 1,184 on December 16, the highest since at least January 1991, according to Baker Hughes, an oilfield-services provider.

Encana wells

• Last month, the EPA said for the first time that it found chemicals used in hydraulic fracturing in drinking water in Wyoming. Encana, which operates 150 wells in the region of Wyoming, said on December 20 that the EPA failed to take into account naturally occurring chemicals and the possibility that the agency contaminated its own tests.Total pursued shale opportunities outside France because of a ban on hydraulic fracturing in the company’s home country. Scott Hanold, a Minneapolis-based analyst for RBC Capital Markets, said the December 31 quake in Ohio — the tenth in that region in a year — is unlikely to spur restrictions that may disrupt US shale exploration.“No one has made a concrete connection between earthquakes and drilling,” Hanold said in a telephone interview. “There’s not a lot of fear of regulation right now.”

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