North American shale fields are drawing billions of dollars from companies that are eager to learn the techniques to tap into the difficult geological formations.
Blackstone said on Tuesday it teamed up with shale gas developer Alta Resources to form Alta Energy Partners and they are committing to invest up to $1 billion via this entity to acquire and develop unconventional oil and gas assets in North America.
Unconventional assets include shale rock fields that may hold vast quantities of oil and gas but are more expensive to tap than traditional energy reservoirs.
To access the resources, energy producers use a technique called “hydraulic fracturing,” in which large quantities of water and sand are mixed with chemicals and pumped under high pressure into the wells to break apart the brittle rock and release oil or gas.
That “fracking” has led to a backlash in some areas, where residents and environmentalists blame it for contaminating drinking water supplies and fouling streams and rivers.
Texas’ Barnett Shale was among the first of these giant fields to be developed, and energy companies have swarmed to other similar energy fields, including the Fayetteville shale in Arkansas and the Marcellus shale in Pennsylvania.
High oil prices have rekindled interest in oil and liquids-heavy fields, such as the Eagle Ford and Bakken shales, prompting energy producers to shift their investments away from fields that primarily produce natural gas.
Alta is run by CEO Joseph Greenberg and has as a partner George Mitchell, one of the industry’s first to recognize the potential in shale fields.
KKR has also been investing in shale. It created a partnership KKR Natural Resources with Premier Natural Resources, to pursue investments in North American oil and gas properties.
(By Megan Davies and Matt Daily; editing by Derek Caney)