Halliburton taps Blackrock for $500 million

Halliburton has signed a joint venture agreement with Blackrock to help fund a new drilling programme targeting existing onshore shale wells in the US. The deal could see the US investment company provide up to $500 million to the US oilfield services giant over a three year period.

The funding will accelerate Halliburton’s refracturing operations. Touted as shale’s version of enhanced oil recovery, refracturing involves re-entering and restimulating existing shale wells to boost production. By targeting existing wells, refracturing presents a cost-effective alternative to drilling new wells. Drilling typically accounts for 40 percent of the cost of a new well.

While refracturing has received widespread use in conventional fields, it remains new and untested technology for US shale plays. However, Halliburton’s main rival, Schlumberger, as well as Baker Hughes, which Halliburton is soon to acquire, have also expressed optimism in the technique.

Halliburton’s move represents a commitment to the method’s viability, and could provide a new direction against the trend of oil producers shying away from new drilling investment.