Russia and China will lead the way in the production of resources from shale after the US according to executives at the Financial Times Global Commodities Summit in Lausanne, Switzerland, as reported in April by Rigzone. Torbjorn Tomqvist, chief executive of trading house Gunvor said (…) it was clear that shale production on a similar scale to that in the US is possible in several of the world´s biggest current energy producers and consumers, but that Europe is unlikely to be transformed by it. Mr Tomqvist added “I think in Russia, you will see the first major change. You have the political climate there to drive through large-scale shale operations both in gas and oil.” (1)
Russia’s shale oil potential is not fully mapped, but the Bazhenov formation in Western Siberia is considered one of the largest, and ExxonMobil teamed up with Rosneft at the start of 2013 to begin drilling. (2)
Tomqvist also said that China, Australia and South America were promising as shale-exploiting countries. Bob H. Takai, general manager in energy for Sumitomo Corp said that China could rival Russia as the biggest shale producer: “As far as the reserve is concerned I think China has got the largest potential reserves of shale oil and shale gas, even bigger than the US.” But he added that before those reserves could be accessed China would struggle with problems ranging from infrastructure to the availability of water. (3)
The country could, according to “Clyde Russell: Australia, Not China, the Next Great Shale Gas Hope”, lose out to Australia in the race to be second behind the United States in bringing significant production on line. Australia has several advantages over China when it comes to developing shale gas reserves. Even though the reserves are in remote areas, there is existing infrastructure available as some of these areas, such as the central Australian Cooper Basin, have long histories of conventional gas and oil production. This gives shale gas output the ability to flow from the centre of the country to the east coast where it could be fed into existing, or expanded, LNG plants. In fact, Santos, Australia’s number two energy firm has started shale output on a commercial scale and plans to feed the gas into an LNG plant that it is building in partnership with Malasia’s state-owned Petronas. (4)
Looking towards Latin America, Ali Moshiri president of Chevron’s Latin America and African operations stated that “The potential in Vaca Muerta is big enough to make Argentina energy independent”. The country’s shale oil and shale gas reserves are located mainly in this formation which is located in the province of Neuquén. He added that Chevron and YPF may be able to access the oil using vertical drilling techniques rather than the horizontal methods used to develop most of the world’s shale gas, and said on this: “I think maybe Vaca Muerta will be the place that everybody comes to look at to see how to develop shale oil”. (5)
With regard to Europe, the UK has seen a sea change in its attitude to shale gas exploration, the fracking ban was lifted in mid-December last year and more recently the government announced large tax breaks for shale gas production.
Poland holds “some of Europe’s most favorable infrastructure and public support for shale development” according to the EIA May Report prepared by Advanced Resources International “World Shale Gas and Shale Oil Resource Assessment”. The report highlighted the Baltic Basin in northern Poland as “the most prospective region”. However, estimates of shale resources in Poland vary significantly. The Polish Geological Institute (PGI) and the US Geological Survey (USGS) collaborated on a preliminary shale gas and shale oil assessment of the country in 2012. The PGI estimated that technically recoverable shale gas resources in the onshore Baltic-Podlasie region to be between 8 and 22 trillion cubic feet, while shale oil resources were estimated at between 1.6 and 1.9 million barrels. But the corresponding USGS estimate was around 1.35 trillion cubic feet of gas and 0.17 billion barrels of oil. The EIA report estimated 146 trillion cubic feet and 1.8 billion barrels for Paleozoic shale gas and oil.
Poland has made the most progress in Europe in bringing about a shale industry, but early results have not, however, met the country´s high initial expectations. The EIA considers that it is too soon to dismiss the country´s shale potential.
Eastern Europe, excluding Poland, has significant prospective shale gas and oil resources, according to the EIA. They exist in the Dnieper-Donetz Basin, in eastern Ukraine and southern Belarus; the Carpathian Foreland Basin that stretches from southwestern Ukraine through northern Romania to the Black Sea; and the Moesian Platform that stretches across Romania and Bulgaria. The EIA estimates that that total risked, technically recoverable shale for these three basins is 195 trillion cubic feet of shale gas and 1.6 billion barrels of shale oil and condensate.
Numerous shale gas basins and formations exist in northwestern Europe, but France and the Netherlands have fracking bans in place. Germany´s government has not yet approved shale gas fracking, although it is looking at allowing the existence of a strictly-regulated industry.
In Denmark, Norway and Sweden potential extractable shale gas exist in the Alum Shale which according to the EIA is judged to be shallow, thin and immature. Nevertheless the EIA estimates that there are 32 trillion cubic feet of risked, technically-recoverable shale gas resources in Denmark.
Two basins in Spain have been identified as having potential for shale gas and oil: The Basque-Cantabrian Basin, in northern Spain, with potential for wet gas and condensate; and the Ebro Basin which was not quantitatively assessed by the EIA for its May 2013 study. Technically-recoverable shale gas resources in the Basque-Cantabrian Basin are estimated at 8 trillion cubic feet, while there is also an estimated 100 million barrels of risked, technically recoverable shale oil resource there. There is political opposition to fracking in this country that is more sparsely populated than its northern neighbours. (6)[spacer height=”15px”]
By Stuart Wilkinson
oileconomyfocus.com
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Shale Oil: Will the “Shale Revolution” be just in the United States?
- Part I: A general view starting from the U.S.A.
- Part II: Shale in russia, china, europe, australia and latin america
- Part III: Shale in africa and asia
- Part IV: Shale and global oil and gas reserves – revealing figures
- Part V: Shale to be a geopolitical game changer
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References:
1 and 3: Shale Boom Could Happen in Russia, China but not Europe. Rigzone, 18th April 2013
2: Statoil Eyes Russian Shale over U.S. Fields. The Moscow Times 26th August 2013
4: Clyde Russell: Australia, Not China, the Next Great Shale Gas Hope. Rigzone, 17th September 2013
5: Chevron, YPF Sees Argentina as possible Shale-Oil Pioneer. Rigzone 16th May 2013
6: EIA Report prepared by Advanced Resources International “World Shale Gas and Shale Oil Resource Assessment”. May 17th 2013
Also see in the OEF ENVIRONMENT Section “Fracking: Water and Earthquakes”, and in the OEF TECHNOLOGY Section “Fracking with Gas rather than Water”.