HONG KONG, July 28 (Reuters) - China National Petroleum Corp (CNPC), China's top state oil firm, is thinking of bidding for minority stakes in shale gas assets of Chesapeake Energy Corp (CHK.N: Quote, Profile, Research, Stock Buzz), according to a local newspaper report.

Chesapeake is looking to raise as much as $5 billion this year from selling minority stakes in its Arkansas and Pennsylvania shale gas properties, the South China Morning Post reported on Monday, citing unnamed market sources.

Energy companies are spending heavily to lock up acreage in hot shale plays, where oil and natural gas are trapped in layers of rock. Record energy prices and technology such as horizontal drilling have made retrieving hydrocarbons from shale profitable.

Earlier this month BP Plc (BP.L: Quote, Profile, Research, Stock Buzz) agreed to buy 90,000 acres of Chesapeake's Oklahoma natural gas properties, currently producing about 50 million cubic feet of natural gas equivalent per day, for $1.75 billion in cash.

In the same week, Royal Dutch Shell Plc (RDSa.L: Quote, Profile, Research, Stock Buzz) agreed to spend about $5.9 billion to buy Canada's Duvernay Oil Corp (DDV.TO: Quote, Profile, Research, Stock Buzz) to boost its own production from tight gas.

But any large Chinese investment in the United States risks reopening the scars of a $18.5 billion bid by CNPC's stablemate CNOOC for U.S. oil firm Unocal in 2005, which failed after stirring up political opposition in Washington

There investors are building confidence again even with the falling prices of Natural Gas....CHK is Focusing on the HS more and more everday.
http://www.reuters.com/article/marketsNews/idINHKG8501520080728?rpc=44