Halliburton (HAL) announced a joint partnership with an SPT Energy Group affiliate for fracking services in China on Friday.
The oilfield service provider inked a deal with Petrotech (Xinjiang) Engineering Co., a SPT Energy affiliate, to form the Xinjiang HDTD Oilfield Services Co. Ltd. joint venture. The new company will provide fracture stimulation services, like design and analysis, data acquisition, and pumping and chemical services in northwest China.
The deal is Halliburton's first joint venture for hydraulic fracturing services in China, according to the press release.
Halliburton shares dipped 0.8% to 68.62 on the stock market today.
"Over the next decade there will be great opportunities from the parallel development of conventional and unconventional resources in China," David Zeng, Halliburton's VP for China said in the release. "SPT's strong client relationships combined with Halliburton's technical expertise positions Xinjiang HDTD to be the leading service provider as we develop westward.
So far fracking has been largely an American success story with booming production from the Eagle Ford, Bakken and Marcellus shale plays. Ventures overseas, like in the U.K., Poland, and Argentina, have been less successful for political and economic reasons. But China has plans to model its own energy revolution after America's fracking boom. Chinese companies have invested in U.S. natgas drillers as it looks to ease its dependence on coal, which is responsible for environmental and economic issues in the country.
Halliburton's Oil & Gas- Field Services group is ranked No. 10 out of the 197 industry groups IBD tracks. Halliburton has a 95 Composite Rating out of a possible 99. IBD's Composite Rating rates stocks in five areas, with extra weight on earnings and stock price strength.
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