Chevron joins Australian shale gas industry

Chevron Corp. agreed to a deal with Beach Energy Ltd. for shale gas exploration in Australia. Chevron, the second-largest energy company in the United States, will pay as much as $349 million for the company's investment, according to Bloomberg.

The company said they will receive nearly 60 percent of a permit in South Australia and 36 percent of a block in Queensland from Beach Energy. Both areas account for about 810,000 acres in the Cooper Basin, Bloomberg reported. The Australian government estimates the Cooper Basin contains nearly 400 trillion cubic feet of shale gas.

Chevron is just one of the energy companies showing a growing interest in oil and gas exploration in Australia's shale formations.

"The resource in the Cooper is being progressively de-risked and we'll over time see a commercial development from this," said John Young, an analyst at an Australian investment group.

Reuters said Australia's best prospects for commercial shale production are believed to be located in the Cooper Basin.

For more information on the shale gas market, visit PennEnergy's research area.