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    Halliburton, STP form JV for unconventional exploration in China

    Halliburton (NYSE: HAL), the oilfield services company with the largest hydraulic fracturing fleet, has signed an agreement with the SPT Energy Group Inc. affiliate, Petrotech (Xinjiang) Engineering Co. Ltd., to establish a joint venture company focused on hydraulic fracturing and production enhancement services in Xinjiang, China. The new company, Xinjiang HDTD Oilfield Services Co. Ltd., will provide fracture stimulation services, including design and analysis, data acquisition, and pumping and chemical services in the Xinjiang Uygur Autonomous Region. 

    The deal represents Halliburton's first hydraulic fracturing joint venture in China. Halliburton said it has partnered up with a Chinese oil company to form a joint venture that will provide fracturing services in the restive Xinjiang region in northwest China, near the Tarim Basin, one of China’s biggest unconventional resource plays.

    Xinjiang HDTD Oilfield Services Co., the joint venture company, is Halliburton’s first in China. Halliburton’s Chinese partner, STP, owns 51% of the firm, making it Chinese-controlled. China’s oil industry is dominated by state-owned firms, which the government considers vital to its national interests. So far, state-owned oil companies haven’t developed much of the country’s unconventional resources, lacking the technology to fracture dense tight oil and shale gas reservoirs.

    SPT Energy Group has provided oilfield technical services in Xinjiang’s Tarim oil field for 20 years, with a market share ranked first among privately-owned companies. Seventy-five percent of the market share in high-end completion services in the field was achieved through SPT’s collaboration with Halliburton over the past seven years, and the market for horizontal drilling and fracturing services is increasing rapidly. By 2025, the total barrels of oil equivalent (BOE) in the Tarim oil field is expected to be 50 million tons, while total BOE throughout Xinjiang province is expected to reach 100 million tons and account for up to one-third of China’s BOE.

    In addition to hydraulic fracturing, the joint venture will also do design and analysis work on wells, as well as data acquisition, and pumping and chemical services in the Xingiang region.

    David Zeng, Halliburton’s vice president for China said, “Over the next decade, there will be great opportunities from the parallel development of conventional and unconventional resources in China. SPT’s strong client relationships, combined with Halliburton’s technical expertise, positions Xinjiang HDTD to be the leading service provider as we develop westward.”

    Dave Lesar, Halliburton’s chairman, president and CEO, said, “Halliburton looks forward to strengthening our partnership with SPT Energy Group by bringing a suite of integrated, comprehensive solutions to the challenge of developing China’s unconventional reservoirs. Our basin-specific knowledge, industry-leading technologies, and expert people have solved unconventional challenges around the world, and we are excited about growing our presence in China.”

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