16 Jul 2011

BHP buys shale gas operation in US

7:01 am on 16 July 2011

BHP Billiton is to buy Petrohawk Energy in the United States to boost its presence in the shale gas market there.

BHP will pay $US12.1 billion in cash, giving it access to shale oil and gas assets across one million acres in Texas and Louisiana.

The BBC reports BHP also agreed to buy Chesapeake Energy's Arkansas-based gas business for $US4.75 billion a few months ago.

Demand for shale gas has increased as other fuel costs have risen.

BHP said the deal provides it with greater exposure to the world's largest energy market and broadens the company's geographic and customer spread.

Shale gas is extracted from shale rocks though a process called 'fracking'.

The United States has vast deposits of these rocks.