A total of 21 joint ventures by foreign companies accounted for 20% ($26bn) of the $133.7bn invested in US tight oil and shale gas plays between 2008 and 2012, according to the US Energy Information Administration (EIA). The rest of the investments were either part of outright acquisitions - such as the Australian company BHP Billiton's acquisition of Petrohawk Energy - or were joint ventures among US companies (such as Hess and Noble Energy with Consol Energy) and financial institutions. Most of the foreign investment in these joint ventures involved buying a percentage of the host company's shale play acreages through an upfront cash payment with a commitment to cover a portion of the drilling cost. Foreign investors in joint ventures pay upfront cash and commit to cover the cost of drilling extra wells within an agreed-upon time frame, usually between two to 10 years. Both US and foreign companies benefit from these deals. US operators get financial support, while foreign companies gain experience in horizontal drilling and hydraulic fracturing that may be transferable to other regions. In addition, foreign companies can operate in a stable market with a sound legal system and low political risk, notes the EIA.
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