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NEW YORK, Feb 25 AFP

February 26 2013, 03:24AM

Chinese oil giant Sinopec is investing $US1.02 billion ($A995 million) in a US shale field as it teams up with Chesapeake Energy Corp in a 50-50 joint venture, the companies say.

China Petroleum & Chemical Corp (Sinopec) will buy a 50 per cent interest in Chesapeake's 340,000 hectares in Mississippi Lime shale in northern Oklahoma, they said in a joint statement.

The two companies will share the costs of all future exploration and development, while Chesapeake will be in charge of leasing, drilling and operations and marketing activities.

Oklahoma City-based Chesapeake, the second-largest producer of natural gas in the United States, has been shedding assets to pare down massive debt.

The Mississippi Lime joint venture with Sinopec "moves us further along in achieving our asset sales goals and secures an excellent partner to share the capital costs required to actively develop this very large, liquids-rich resource play", said Steven Dixon, Chesapeake's chief operating officer.

Chesapeake produced on average 34,000 barrels of oil equivalent per day from the Mississippi Lime assets in the 2012 fourth quarter, and at the end of last year proven reserves were estimated at 140 million barrels of oil equivalent.

The transaction was expected to be completed in the 2013 second quarter.

Analyst Paul Ausick of 24/7WallStreet.com noted that Chesapeake already had sold more than $US3 billion in assets to China's energy giant CNOOC.

"The interesting thing that could develop from this is a sale of a US producer - not necessarily Chesapeake, of course - as a result of the recently approved $US15 billion acquisition of Nexen Inc by CNOOC," he said.

"The US approved the sale of the Canadian-based firm and may have opened the door for more aggressive bidding by China's big state-backed oil firms."