BP in shale deal as prices rise

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BP is to pay $1.9bn (£1.1bn) for part of Chesapeake Energy's shale assets in Arkansas, in a bid to secure sources of energy as gas prices rise.

Chesapeake is to sell 25% of its shale assets in Fayetteville to the firm.

In order to access gas or oil that is locked in shale, complex and expensive technology is required for drilling.

The latest deal comes after the British energy giant bought all of Chesapeake's Arkoma Basin Woodford shale assets in Oklahoma for $1.7bn in July.

Following the latest deal, Chesapeake said it was pursuing similar transactions with its Marcellus shale assets, and hoped to complete a deal by the end of 2008.

As energy prices rise, it makes investing in shale more attractive as the costs related to drilling and extracting gas and oil are better compensated.