SHALE GAS INVESTMENT GUIDE
SHALE GAS
investment
GUIDE
WINTER 2015
EXPLORER
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IGAS
A LICENCE TO WAIT
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CONTENTS
SHALE GAS INVESTMENT GUIDE | WINTE R 2 015
13 //
Aberdeen
ANALYSIS
Glasgow
Belfast
IRELAND
Liverpool
Manchester
Birmingham
London Bristol
FEATURE
NEW MARKETS
24 //
38 //
Lorem Ipsum
6 | SHALE GAS INVESTMENT GUIDE | WINTE R 2 015
64
SERVICES DIRECTORY 56 //
SERVICES
DATA TRACKER
INDICATORS
CONTENTS
18 // TRENDING 24 // Explorer
30
• UK onshore Licensing Round • IGas CEO Interviewed • shale likely to get go-ahead
Scotland
moratorium here to stay
32
Turkey
34
Sweden
36
US Ethane
unexplored potential small resources, big game soon to hit port near you
42 // SAUDIS’ SHALE ZUGZWANG 46 // ENVIRONMENT clean after yourself
48
backtracking on fracking
Service Directory
62
Events
42
South Africa
56
28
a sample
E-SGOS in Manchester
62 W W W.CLEANTECHPOLAND.COM
|7
OPINION
BY WOJCIECH KOŚĆ
Europe’s gas problem Europe has a problem with gas because gas has problems.
THE EUROPEAN UNION has a problem with gas. The bloc is importing close to 50 percent of the gas it needs, while production is weakening, both onshore and offshore. This is because the European fields are maturing after decades of exploration, with new discoveries not making up for dwindling output. As a result, the EU is forecast to become gradually There is a slowly more dependent on developing trend of gas imports. Some claim this is not a divestment from still problem here and now because there strong coal in Europe is global oversupply over the gas bridge of gas. LNG is in abundant amounts right into renewables. globally and yet there is more to And not without come, as LNG from some reason the American shale riches will soon hit Europe’s shores. Facing competition from LNG as was the case in Lithuania and will soon be in Poland - Russia is trying to maintain its market share by pumping more gas down its pipelines at discounted prices. Even Ukraine got a discount, just before the onset of winter, when it would be easiest to blackmail Kiev with a higher price. So why are European exploration and produc-
8 | SHALE GAS INVESTMENT GUIDE | WINTE R 2 015
tion markets struggling, with gas losing its market share to coal? Gas may be cheap, but coal is cheaper. Coal has long been an established part of Europe’s energy landscape, and problems with shifting away from it are compounded by its relatively low price. As the EU is trying to reduce its emissions, renewables are advancing, undercutting the position of gas. The gas sector is also worried that a technological breakthrough, allowing the storage of energy from renewables efficiently and on a large scale, will render gas infrastructure, investment which takes a long time to build and prepare to operate obsolete. One could feasibly expect to see intensification of the slowly developing trend of divestment from coal pushing Europe to leapfrog from coal over the gas bridge and right into renewables. That would be a bleak outlook for the gas industry in Europe as a whole, although there is hope that the oil price will go up, potentially reinvigorating gas exploration, including shale gas. There are still companies in Europe that believe, as one may infer from the level of interest (albeit not that big) in unconventional gas exploration in the UK. Obviously, no one is expecting drilling to take off in the UK even on the very modest scale seen in Poland recently, but, in the current situation, a comprehensive seismic program across the British acreage could be seen as a wakeup sign of an industry long in hibernation.
SHALE GAS
MASTHEAD
investment
GUIDE
EDITOR IN CHIEF WOJCIECH KOŚĆ
PUBLISHER PARKER SNYDER
ART DIRECTOR ŁUKASZ MAZUREK
ORIGINAL TEMPLATE PAIGE WEIR
HEAD ANALYST PIOTR WDOWIŃSKI
COMMUNICATIONS GABOR CHODKOWSKI-GYURICS
COPY EDITOR JO HARPER
DTP ROBERT WALCZYŃSKI
OFFICE MANAGER NATALIA SZYDŁAK
WRITERS RADEK BUDZOWSKI, NILIMA CHOUDHURY (LONDON), GABOR CHODKOWSKI-GYURICS, RHODRI DAVIS (BUENOS AIRES), DAVID GACS (BUENOS AIRES), PAUL GARRETT IN MEMORIAM (LONDON), TIM GOSLING (MOSCOW, PRAGUE), ANDREW HOBBS (PERTH), MIRONA HRITCU (BUCHAREST), LINAS JEGELIVICIUS (VILNIUS), HUBERT KAROŃ, STANISŁAW KOCZOT, JAKUB KOCZOT, JULIUSZ KOWALCZYK, PIOTR LEWANDOWSKI, IAN LEWIS (LONDON), SARA LICHWA (LONDON), S.R. SCOTT (LONDON), ZUZANNA MARCHANT (LONDON), NIKOLAY MARCHENKO (SOFIA), JERIN MATHEW (BANGALORE), WU MING (BEIJING), CHARLES NEWBERY (BUENOS AIRES), NICHOLAS NEWMAN (LONDON), GREG PENFOLD (CAPE TOWN), CL AUDIA PEREZ RIVAS (TEX AS), SONJA VAN RENSSEN (BRUSSELS), OZAN SAGLIK (TURKEY), GRAHAM STACK (KIEV), DOMINIC SWIRE (BEIJING), ALICE TRUDELLE (QUEBEC), GORDON WASILEWSKI, CHRIS WALDBURGER (NATAL, SOUTH AFRICA), JAN W YPIJEWSKI, JUDE WEBBER (MEXICO CITY)
EXPERT CONTRIBUTORS OLGA ANDRIENKO-BENTZ, JACEK CIBORSKI, PIOTR DOBROWOLSKI, FLORENCE GENY, GRZEGORZ KUŚ, DREW LEIFHEIT, EVA-MARIA MACIĄŻEK, PAWEŁ POPRAWA , ELENA REVUTSKAYA , WOJCIECH SŁOWIŃSKI, VIDAS VENCKUS, NAGLIS VINCIUNAS
INTERNS OZAN SAGLIK, KATARZYNA SKOLIMOWSKA
EDITORIAL CONTACT WOJCIECH KOŚĆ, WOJCIECH@CLEANTECHPOLAND.COM, (+48) 602 458 099
ADVERTISING CONTACT PARKER SNYDER, PARKER@CLEANTECHPOLAND.COM, (+48) 517 469 881
PUBLICATION PARTNERS PWC, SSW, CUSHMAN & WAKEFIELD, NUTECH, CH ROBINSON
GUEST COLUMNISTS FRANK MAIO, KATHRYN Z. KLABER, KAMLESH PARMAR, ANDREW AUSTIN, DAVID ALAMEDA
KEY PHOTOGRAPHY LOU DENIM, KM RATSCHKA , KONRAD SIEROŃ, SZYMON SZCZEŚNIAK, WEMAKEPICTURES.CO.UK
PRINTER DRUKARNIA BELTRANI, W W W.DRUKARNIABELTRANI.PL, KRAKÓW,
DISTRIBUTION TM MEDIA , AL. JANA PAWŁA II 61/239, 00-117, WARSAW
SUBSCRIPTION THE SHALE GAS INVESTMENT GUIDE IS PRINTED T WO TIMES A YEAR. THE MAGAZINE IS DIRECT MAILED TO OIL AND GAS OPERATORS IN THE EU-28 AND NORTH AFRICA . TO SUBSCRIBE, WRITE TO INFO@CLEANTECHPOLAND.COM.
PUBLISHER CLEANTECH POLAND LLC, UL. KRUCZA 51/31, 00-022 WARSAW, POLAND
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|9
COMMERCIAL PARTNERS To become a partner for the magazine, please contact the publisher
Jereh is a world leading oil & gas equipment manufacturer and services provider, present in 63 countries worldwide, and represented by Cleantech in Central and Eastern Europe.
Cleantech is a consultancy for oil and gas providing data, sales and marketing services. Cleantech publishes the Shale Gas Investment Guide and EXPLORER, commercial operator data.
LMKR GeoGraphix Integrated system providing geological and geophysical interpretation & mapping, geosteering, geomodeling, field planning and development capabilities.
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FIND US PwC is a consultancy providing oil and gas companies with services in assurance, advisory and tax & legal. PwC has been in Poland for twenty years and counts many of the largest oil and gas companies as clients.
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3 11 12 17 back cover
DIRECTORY
56
Geofizyka Toruń is the largest seismic acquisition company in Europe with global operations. GT delivers innovative geophysical solutions for more effective exploration. www.geofizyka.pl
www.pwc.pl
Nutech is a U.S. based global oilfield consultancy providing reservoir optimization and evaluation services including optimization of existing wells. www.nutechenergy.com
10 | SHALE GAS INVESTMENT GUIDE | WINTE R 2 015
The American Chamber of Commerce (AmCham) is a business organization that serves and promotes its member companies. AmCham fosters positive relationships with the government and promotes the free market spirit. www.amcham.com.pl
SSW is a law firm providing comprehensive tax and legal advisory services. SSW specializes in energy and natural resources, advising on mining and energy law. www.ssw.pl
Unconventional Secrets What you should know before you drill, delineate, perforate or complete.
Not all unconventional reservoirs are the same. Not in the ground or in your portfolio. They can boost your prospects or lower the boom. How you characterize and develop the reservoir has a huge impact on your bottom line. The answer? Reservoir Intelligence. Reservoir Intelligence is the critical information that impacts every decision from initial investment to the last barrel you pump out of the ground. Knowing precisely what you have, and how to extract it efficiently, requires some study. But it’s science that will pay for itself many, many times over. Contact NUTECH today. The world’s leading purveyor of Reservoir Intelligence will help you make profitable decisions across the entire lifecycle of your asset. For free insight on the state of unconventional exploration and production, call +1-866-688-3241/+44 7785 261308 or visit us at www.nutechenergy.com.
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PwC Your trusted oil & gas and chemical advisor
For years, we support our clients with knowledge and market experience by providing business advisory, tax and legal advisory, audit and accounting consultancy. We are happy to talk with you about the needs of your business. Business Advisory
Tax and Legal Advisory
Wojciech Słowiński – Partner phone: +48 502 184 420 wojciech.slowinski@pl.pwc.com
Tomasz Barańczyk – Partner phone: +48 502 184 852 tomasz.baranczyk@pl.pwc.com
© 2015 PwC. All rights reserved. PwC refers to the companies associated in the PricewaterhouseCoopers International Limited (Pw CIL), each member of which is a separate legal entity and does not act on behalf of PwCIL or other member firms.
12 GUIDE || SSEEA A SO N 220X 12 || SHALE SHALEGAS GASINVESTMENT INVESTMENT GUIDE SON 0XXX
SHALE GAS
investment
GUIDE
INDICATORS $/Bbl 130 120 110 100 90 80 70 60 50 40 30
EXPLORATION ACTIVITY, PL & UK Concessions
BRENT
300
2011
2012
2013
2014
Wells drilled
Active concessions Cumulative wells
150
200
100
100
50
0
2015
2011 2012 2013 2014 2015
SOURCE: CLEANTECH
E X P E RT V I E W
SZYMON SZCZEŚNIAK
OIL PRICE
0
SOURCE: CLEANTECH
In Q3 and early of Q4 of 2015, the crude oil price was moving between 45 and
55 USD/bbl. This low oil price environment negatively affected exploration activities in Europe. According to the IMF World Economic Outlook's fall edition, the oil price might not significantly pick up until 2020. Nevertheless, even in unfavorable macroeconomic environment and with exploration expenditure falling exploration is ongoing in Algeria, Morocco, Poland, Turkey and the UK. EUROPEAN UNCONVENTIONAL OIL AND GAS BY COMPANY
LICENSE ACTIVITY IN EUROPE BETWEEN Q3-Q4 2015 Company
Country*
ShaleTech Energy PL IGas UK INEOS Upstream UK Egdon Resources UK AB Igrene SE Gripen Oil&Gas SE TransAtlantic TR TPAO/Shell Upstream TR Turkey Eni Spa UA Third Energy UK Wintershall DE ExxonMobil DE, (PL) GDF Suez UK Hutton Energy UK (PL) SHESA ES Valeura Energy TR BNK Petroleum PL Ascent Resources SL Cuadrilla Resources PL, UK, (NL) PGNIG PL Orlen Upstream PL Palomar Natural Resources PL Total UK, (DK) San Leon Energy PL * Country code in parentheses denotes operator left that country
TC* (change)
New wells
7 (+4) 62 9 35 25 23 5
-
3
2
7 5 9 18 28 4 5 2 3 1 5(-2) 5(-5) 7(-2) 1(-2) 3 (-1) 8(-7)
1 SOURCE: CLEANTECH
As a result of low oil prices, operators in Europe are investing less in explora-
tion for unconventional oil and gas. One of three shale gas wells in Europe in H2 of 2015 was drilled by PGNiG. The company aims to drill one more well this year, - Wysin 3H. Apart from PGNiG, Shell Upstream Turkey and TPAO where drilled and tested two wells in Turkey. Drilling activity is also expected in Ukraine, Eni plans three shale gas wells. In Turkey, Valeura wants to drill a tight gas well but that will depend on finding joint venture partner, for the project.
PIOTR WDOWIŃSKI H E A D A N A LYS T CLEANTECH
In the second half of 2015, the slow
pace of unconventional oil and gas exploration in Europe has persisted. Depressed oil prices, which hovered around $50 per barrel keep discouraging operators from investing in unconventional exploration. During July-October, only the Polish state-controlled explorers PGNiG and Orlen Upstream drilled a total of two shale gas wells. PGNiG is going to try to perform a new fracking method on itsWysin-2H well, in which two shale layers will be stimulated at the same time, potentially increasing the chance of finding commercial gas flows. This year PGNiG most likely will drill one well, Wysin-3H, while 2016 may see another one, Lubocino-4H. In the UK, the Oil and Gas Authority released information on 27 license blocks to be offered to companies by the end of the year. These are not concessions yet, but it is a formality before they are officially awarded. Full results of the licensing round will be announced by the end of 2015. Positive signs have recently come from Morocco, where Irish explorer Circle Oil announced that its Ksiri WestA (KSR-A) shale gas exploration well yielded preliminary results of about 225,000 cubic meters of gas flow per day. The company intends to start production soon. Another unconventional hot spot in Europe is Turkey. A joint venture of TransAtlantic and Valeura Energy has already fracked 20 tight gas wells out of which 18 are in production. Moreover, a JV of TPAO and Shell Upstream have finished drilling, stimulating and testing their first two shale gas wells in the third quarter of 2015.
W W W.CLEANTECHPOLAND.COM
| 13
SHALE GAS
investment
GUIDE
INDICATORS UK 14TH ONSHORE LICENSING ROUND: FIRST TRANCHE AWARDS 27 Blocks offered in 1st tranche
54 %
132 Blocks to still be awarded Aberdeen
UK GAS DEMAND AND CONSUMPTION 2014
Glasgow
Import Dependency
67
Belfast
The British government
wants to increase its domestic production of oil and gas. To that end the country wants to start exploration of its onshore acreage, which is believed to hold significant resources shale. By the end of 2015, full results of the 14h onshore licensing round will be published.
IRELAND
Liverpool
Manchester
37 Birmingham
London Bristol
BCM
Demand
BCM
Production
SOURCE: CLEANTECH
1 4 T H O N S H O R E L I C E N C E RO U N D F I R S T T R A N C H E B LO C K S B Y O P E R ATO R Operator ADM ADM Aurora Petroleum Blackland Park Cirque Energy Cirque Energy Cirque Energy Cirque Energy Cuadrilla Resources Cuadrilla Resources
Block SK86c SK96 SD62 SK87b TF06 TF07e TF07f TF17 SE40f SE95
Egdon
SK52a
Egdon
SK53
GDF Hutton Energy Hutton Energy IGas IGas IGas IGas IGas IGas IGas INEOS INEOS INEOS Osprey Warwick Energy
TF36 SE42e SK72a SK49 SK87c SK88b SK89e SK99a TF18b SE41e SK45 SK48 SK58a SD61 SK43
2015 BY OPERATOR
Partners Milroy Capital Limited, Aberdeen Hydrocarbon Development Limited Milroy Capital Limited, Aberdeen Hydrocarbon Development Limited – – Swift Exploration Limited, Stelinmatvic Industries Limited, Swift Exploration Limited, Stelinmatvic Industries Limited, Swift Exploration Limited, Stelinmatvic Industries Limited, Swift Exploration Limited, Stelinmatvic Industries Limited, – Cuadrilla Resources Limited, GDF Suez E&P UK Limited Hutton Energy Plc, Coronation (Oil And Gas) Limited, Petrichor Energy UK Limited, Celtique Energie Petroleum Limited, Hutton Energy Plc, Coronation (Oil And Gas) Limited, Petrichor Energy UK Limited, Celtique Energie Petroleum Limited, – Coronation (Oil And Gas) Limited Coronation (Oil And Gas) Limited Total E&P UK Limited, Egdon Resources UK Limited Total E&P UK Limited, Egdon Resources UK Limited Total E&P UK Limited, Egdon Resources Uk Limited Total E&P UK Limited, Egdon Resources Uk Limited – – Total E&P UK Limited, Egdon Resources UK Limited – – – OK Energy (Onshore) Limited, Energy Development And Investments UK Limited, Anglia Natural Gas Sarl
The 27 blocks listed in the above table are still preliminary decisions from the UK Oil and Gas Authority. However, the even-
tual granting of concessions on those blocks is a formality. With over 100 more blocks awaiting decision, the UK unconventional gas effort is seeing renewal of interest from explorers. SOURCE: UK OIL AND GAS AUTORITY 2015
14 | SHALE GAS INVESTMENT GUIDE | WINTE S E A SO N R 2 015 0X X
SHALE GAS
investment
GUIDE
INDICATORS EXPERT INTERVIEW As the oil price remains depressed and there is a global oversupply of gas, Europe is seeing gas demand at a low point while production from its mostly old gas fields is falling, both offshore and onshore. Cheap coal, low prices of CO2 permits, and advancing renewables are also discouraging investment in the gas sector. The gas industry is facing a challenging time until at least 2020, says Geoffroy Hureau, secretarygeneral of Cedigaz, Europe’s premier gasBCM market analysis firm with over 50 years of tradition.
Unconventional gas E&P will have to wait until gas prices go up so that a more favorable economic environment emerges; it is not expected before 2020 unavoidable in the long run. Development of new fields is not economic at the moment because they’re mostly small fields that are difficult to explore, with the low price of oil adding to the challenge. The reserve base is going down as well. In the onshore sector, the situation is even more difficult. The demand for gas has been falling recently, but still the depletion of resources and decreasing production make Europe ever more reliant on imports. Are imports the only way to meet European demand for gas?
GEOFFROY HUREAU S E C R E TA R Y - G E N E R A L O F C E D I G A Z
There is not much else that can be done. Shale gas exploration has proven problematic, with several countries having introduced moratoriums on fracking. It has also been difficult to drill for shale gas even in countries that have tried to be more active in the development of unconventional gas. When it’s difficult to drill, you can’t prove the resource potential.
What’s the 10,000-feet view of the gas industry in Europe today?
Much of Central Europe is dependent on Russia for its gas supplies. From what you’re saying it seems that this dependency is only going to grow?
Europe’s gas production is mostly mostly going on in mature fields that have been in production for decades. Reserves are declining across the continent with the only country where this is not the case being Norway. The UK is where production is more or less stable, but even there the decline of production is
Not necessarily. Russian gas is facing competition as well. The global gas market is oversupplied, with LNG especially driving the gas price down recently. Russia is fighting to keep its market position and it is going to do so by becoming more flexible on price. It has little choice because its finances
Development of new fields is not economic at the moment because they’re mostly small fields that are difficult to explore, with the low price of oil adding to the challenge
depend on gas sales. So I would not overstate the factor of Europe being dependent on Russian gas too much. Isn’t becoming more flexible on the price of gas - by Russia or anyone else - problematic also because of the low price of coal?
There’s no denying gas has been losing its market position to coal, because coal has been cheap for many years now and the price one pays for burning it - the price of CO2 emissions - has also been depressed. It’s essential for the prices of coal and of CO2 emissions to go up for gas to start regaining its market position as a fuel for Europe. It’s also essential from the point of view of Europe’s emission targets. Another issue is the rise of renewables, as their development is pushing the price of energy down on the wholesale market. Some gas companies are also looking a bit nervously at developments dealing with intermittency of energy from renewable sources, such as storage. It takes a long time to develop the necessary gas infrastructure, like transmission networks or storage facilities. A technological breakthrough allowing efficient storage of energy from renewables would be a blow for the gas industry. What’s the outlook then for the industry?
Demand should pick up only after 2020 but if it does, it will be met by growing imports, with concerns on security of supply from countries like Russia - or anywhere else for that matter - having only secondary importance on the oversupplied market. In terms of unconventional gas E&P, it will have to wait until gas prices go up too so that a more favorable economic environment emerges for unconventionals. Again, that is not expected before 2020.
W W W.CLEANTECHPOLAND.COM
| 15
SHALE GAS
investment
GUIDE
INDICATORS SHOROUK OFFSHORE: ENI’S SUPERGIANT GAS FIELD DISCOVERY CYPRUS
E X P E RT V I E W
LEBANON
SZYMON SZCZEŚNIAK
SYRIA
ISRAEL LIBYA
EGYPT
Exclusive Economic Zone
PIOTR WDOWIŃSKI H E A D A N A LYS T CLEANTECH
Noble Energy's Aphrodite gas discovery, Israel
Italian energy major Eni announced on
August 30 it discovered a “supergiant” gas field in the Mediterranean Sea, 190 kilometers from the Egyptian coast. According to Eni, well and seismic data indicate that the discovery could potentially hold 850 billion cubic meters (BCM) of lean gas in place, which is the Shorouk Block where Eni holds a 100% working interest. If confirmed, this would be an equivalent of 5.5 billion barrels of oil, or, roughly, 15 years of the Egyptian consumption. “Zohr 1X NFW [well] was drilled to a total depth of approximately 4,131 metres and hit 630 metres of hydrocarbon column in a carbonate sequence of Miocene age with excellent reservoir characteristics, 400+ meters of net pay according to company statement. Eni’s CEO Claudio Descalzi told Bloomberg on August 31 that the cost of developing the field will be low, as necessary infrastructure is already there. The main cost will be connected to drilling. The company also stated that the discovery could become one of the world’s largest natural gas finds and that it will help satisfy Egypt’s demand for natural gas. Egypt is the largest consumer of dry natural gas in Africa. The consumption of gas was approximately 50 BCM and production was 55 BCM in 2013 but recently Egypt has become a net energy importer. The consumption of gas has been growing as the population of Egypt has ballooned from 61 million in 1995 to 84 million in 2015, according to the United Nations. Eni aims to start production in 2017 from the newly discovered field. This puts in doubt potential exports of gas from Israeli Leviathan field to Egypt, which Israel planned to start in 2019.
16 | SHALE GAS INVESTMENT GUIDE | WINTE S E A SO N R 2 015 0X X
JORDAN
Eni's Shorouk gas discovery (Zohr field), Egypt
SAUDI ARABIA
Noble Energy's Leviathan gas discovery, Israel Noble Energy's Tamar gas discovery, Israel
EUROPE’S GAS SOURCES OF IMPORT: PIPELINE AND LNG (2013) Country
Pipeline [BCM]
LNG [BCM]
Russia
136
-
Norway
102
2
Netherlands** Algeria
31 24.8
9.6
Libya
5.2
-
Qatar
-
22.9
Others*
2
9.7
* Denmark, Egypt, Nigeria, Trinidad & Tobago, Peru, Oman, Yemen ** The Netherlands is exporting gas within Europe.
Source: Capgemini
According to Eni’s CEO Claudio Descalzi and European Commissioner for energy
and climate action Miguel Arias Canete, the Egyptian discovery will contribute significantly to European energy security by enhancing the liquidity of the gas market and improving competitiveness of gas against coal. That, however, will be secoundary to satisfying Egypt's domestic demand.
GAS DISCOVERIES IN THE MEDITERRANEAN SEA Country
Gas Field
Resource potential [BCM]
Major shareholder
Start of production
Egypt
Zohr
850
Eni Spa
2017*
Israel
Leviathan
470
Noble Energy
2019*
Israel
Tamar
207
Noble Energy
2013
Cyprus
Aphrodite
101 - 170
Noble energy
2015
* Expected date
Source: Noble Energy, Eni Spa, Bloomberg
Eni’s giant gas discovery is set to change Egypt’s gas outlook. It will force Israel to
redrow its plans for the Leviathan field, which was planed to supply Egypt from 2019. Noble Energy has also considered exports of gas from its Aphrodite field to Egypt, these plans are in question now as well.
W W W.CLEANTECHPOLAND.COM
| 17
TRENDING Jul 10/15 DUTCH GOVERNMENT BANS SHALE GAS DRILLING
Loaded with expectations
THE DUTCH GOVERNMENT issued a five-year moratorium on shale gas drilling and did not renew existing exploration licenses due to uncertainties regarding environmental impact. The ban was proposed by economic affairs minister Henk Kamp and accepted unanimously by the government on July 10. “No answer can be expected to the question of whether it would make sense to further examine the prospect of extracting shale gas until the end of this year,” Mr. Kamp said in a statement. “At that point, I will present a vision of energy policy after 2020, based partly on recent insights relating to sustainable energy, the better utilisation of geothermal energy, and gas extraction in the province of Groningen.” The ministers are waiting for the results of a number of studies, initiated in 2013, to assess social, environmental and economical consequences of shale gas extraction in the country. If the research makes a case for domestic shale gas development, future exploration is to be carried out by state operators, rather than private investors.
IRISH UPSTREAM EXPLORER Circle Oil reported on June 26 that a stable gas flow was reached at its shale gas well in Morocco. The LAM-1 well is located in the onshore Lalla Mimouna block and achieved a stabilized flow of 58,000 cubic meters per day. The well was drilled to a depth of 1,541 meters in May. “We are delighted that our first well on the Lalla Mimouna block has such positive results, flowing gas at significant rates,” Circle Oil’s CEO Mitch Flegg said in a statement. “The productivity of this first well is very encouraging for the expansion of Circle’s portfolio of Morocco gas fields.” Morocco currently depends on costly imports for virtually all of its oil and gas demand. Over the last five years, Morocco has initiated a series of new energy projects, including traditional hydrocarbon development and renewables. Onshore, the relatively unexplored country holds an estimated 566 billion cubic meters of recoverable shale oil and natural gas reserves, according to EIA.
WIKIMEDIA COMMONS
DOLLARPHOTOCLUB
Jun 26/15 GAS FLOWS FROM MOROCCO’S SHALES
No noise for now
Jun 29/15
Jul 7/15
Cuadrilla’s fracking application rejected by Lancashire County Council
China offers six oil and gas exploration blocks to private companies
18 | SHALE GAS INVESTMENT GUIDE | WINTE R 2 015
Jul 28/15 Turkey’s pipelines to Iran and Iraq disrupted by bomb attacks
Aug 30/15 ENI DISCOVERS LARGE GAS FIELD OFFSHORE EGYPT
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TRENDING
Aug 13/15 UK TO FAST TRACK FRACKING APPLICATIONS
It’s London vs the country again
An island in the Mediterranean
A DEDICATED PLANNING PROCESS meant to fasttrack shale gas planning applications was announced by the UK government on August 13. Under the new measures, local councils will now have a maximum of 16 weeks to grant or deny shale drilling applications before the decision is transferred directly to central government’s communities secretary. The introduction of a time limit is seen as a warning to the Lancashire County Council, which rejected two applications by Cuadrilla Resources more than a year after they were submitted. With new regulations, the government hopes to speed up shale gas exploration, amidst claims that exploration will revive the economy. Appeals involving shale gas projects will be given priority by the administration. Shale applications will become a separate criterion for recovery of appeals and may be reviewed by the communities secretary on a case by case basis.
ITALY’S ENI DISCOVERED the largest field to date in the Mediterranean Sea, the oil and gas major announced on August 30. Company’s current geophysical data indicates the field could hold up to 30 trillion cubic feet (850 billion cubic meters) of lean gas. The discovery well was located off Egypt’s coastline at a depth of 1,450 meters, with the prospective Zohr field covering an area of about 100 square kilometers. “It’s an open door to give value and solidity to Eni’s balance sheet,” Eni’s CEO, Claudio Descalzi, said in an interview for the Italian newspaper La Repubblica. “But it will not be a necessary outcome. There is much less to spend than in Mozambique and the new gas is aimed at the local domestic market with prices disconnected from those of oil, which today are at six-year lows,” he said. Eni was reported to look at possibly monetizing a 3040 percent stake in the Zohr field within 3-4 years, according to Reuters.
Jul 29/15
Aug 11/15
Mexico postpones deep-water license auctions
France signs deal with Cheniere Energy to import 100 million MMBtus of US LNG
Aug 4/15 UK support for shale at record low of 21%
Aug 18/15 Total drops shale gas exploration in Denmark
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TRENDING Sep 23/15 ROMGAZ WILL NOT EXPLORE FOR SHALE
Slowed, not yet stalled
ROMGAZ, ROMANIA’S LARGEST natural gas producer, will not search for shale gas resources in the foreseeable future and will instead invest heavily in conventional wells, the company announced on September 23. “We always stressed our base activity is conventional exploration, there are many things to do here,” Romgaz’s general director, Virgil Metea, said at the Reuters East European Investment Summit. “Let’s say in the medium term, up to five years, we do not plan shale gas [exploration]. This is our current stance.”, he said. Mr. Metea said Romgaz has an overall gas production potential of about 5.6 billion cubic meters this year, as the company plans to put RON 1.3 billion lei (€294 million) in domestic exploration and production, with about half of that amount earmarked for the former. This plan represents a 22 percent investment increase from 2014 and is meant to be the new per year minimum.
SINOPEC AND PETROCHINA, China’s state energy giants, are reducing output from conventional gas fields, due to low industrial demand for the fuel. Despite the reductions at conventional fields, the companies said they remained on track to meet a government-set shale gas target this year, as Beijing tries to replicate the shale boom of the United States. Official data showed China’s domestic gas output rose 2.6 percent in the first seven months of 2015, down from 6.9 percent annual growth in 2014, and double-digit amounts of the past decade. As conventional wells are being closed down, hundreds of shale gas wells in Sichuan basin remain scheduled for this year, with a goal of building an annual production capacity of about 7.6 billion cubic meters (BCM) by the end of 2015. China is the only shale gas producing country outside of the US and Canada.
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Sep 10/15 CHINA MAINTAINS SHALE TARGET
Romania no go for now
Sep 30/15 Sep 4/15
Shell to drop a $700 million exploration push in Bosnia
Gazprom, BASF, E.ON, ENGIE, OMV and Shell sign an agreement for Nord Stream 2 pipeline project 20 | SHALE GAS INVESTMENT GUIDE | WINTE R 2 015
Oct 16/15 OIL MAJORS SEEK CLIMATE CHANGE ACTION
SHELL
POLSKIE LNG
TRENDING
Oct 12/15 POLAND LAUNCHES LNG TERMINAL
Waiting for gas from Qatar (or America)
The fuel of the future is...
POLAND WILL BE “fully independent from [natural gas] supplies from the east [in 2016],” the Prime Minister Ewa Kopacz said on October 12 as she attended the official launch of Poland’s first LNG terminal. Having battled delays and arguments with the Italian contractor Saipem, the terminal’s operator, state-controlled company Polskie LNG has the terminal ready for startup tests now, with the first shipment of LNG from Qatargas scheduled for mid-December. Commercial deliveries are slated to begin in May 2016. Qatargas is currently the facility’s sole supplier, contracted to ship 1.5 billion cubic meters (BCM) annually for 20 years. Poland plans to expand its gas grid to enable exporting fuel from Świnoujście facility to Czech Republic, Slovakia, Ukraine, and Lithuania, allowing Warsaw to use the yet-uncontracted 70 percent of terminal’s annual regasification capacity of five BCM.
CHIEF EXECUTIVE OFFICERS of 10 international oil and gas majors declared their collective support for an effective climate change agreement to be reached buring November’s COP21 climate change conference, mandated by the United Nations. “Our shared ambition is for a 2°C future,” the October 16 declaration said. “It is a challenge for the whole of society. We are committed to playing our part. Over the coming years we will collectively strengthen our actions and investments to contribute to reducing the GHG intensity of the global energy mix.” The 10 companies that make up the Oil and Gas Climate Initiative (OGCI), - BG Group, BP, Eni, Pemex, Reliance Industries, Repsol, Saudi Aramco, Shell, Statoil and Total - provide almost a fifth of global oil and gas production and supply nearly 10 percent of world’s energy. No US company has joined the initiative.
Oct 5/15
Oct 14/15
Finland drops plan to build a regional LNG terminal
Lukoil discovers deepwater gas field off Romania
Oct 8/15 Turkey threatens to cut energy deals with Russia over Syria war
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EXPERT’S CORNER
An Operator Who Does Not Miss in the Mississippian LMKR GeoGraphix is providing an Oklahoma operator with the tools and techniques to help target the “sweet spots” and lower their risk to increase their profitability. BY FRED B. POLAND
PRIZM, which is a multi-well petrophysical modeling tool provided in the GeoGraphix integrated suite, which accesses a common project database, used to analyze the formation. With PRIZM, the operator can extend the analysis to the entire reservoir and provide targets for the 3D geological modeling to build a comprehensive field plan. PRIZM provides an extensive group of predefined equations to model in-
dustry standard attributes. This module is sophisticated but easy; it uses a scripting language to build a more extensive petrophysical model. This operator using PRIZM is taking advantage of a laboratory analysis of core data to normalize key attributes in PRIZM models to generate TOC, permeability, porosity, water saturation, brittleness, and other key parameters. Next, this operator is applying a petrophysical model to all the wells
LMKR GEOGRAPHIX
Operators in shale basins are under tremendous stress as they try to navigate challenging economic times. Everywhere companies are cutting expenses to keep their costs down to be aligned with lower oil prices. No longer can the “drill baby drill” mantra of the unconventional heyday be expected to generate the returns required to stay in business and the returns demanded by investors. Smart companies are high-grading their oil prospects with better science, more efficient allocation of resources, and better application of technology. LMKR GeoGraphix is helping them stay in business. One operator in the the heartland of the United States is successfully applying these methods and techniques to keep their rigs running and production flowing. Working in the Mississippian carbonate of the Oklahoma Anadarko Basin, this operator is maintaining economic production despite the downturn in oil prices. First of all, this operator is applying more petrophysics to better understand the reservoir properties before leasing begins. The operator is using
LMKR Well Planner well plan visualized in Pro3D of an LMKR Field Planner well
designed along the target surface generated using smartSECTION with FrameBuilder.
22 | SHALE GAS INVESTMENT GUIDE | WINTE R 2 015
EXPERT’S CORNER
No longer can the “drill baby drill” mantra of the unconventional heyday be expected to generate the returns required to stay in business
used with the Framebuilder 3D topology engine creates geologically sound surface geomodels that maintain consistent conformance rela-
LMKR GEOGRAPHIX
in smartSECTION cross sections to identify and pick key surfaces to build a sequence stratigraphic framework of the reservoir; smartSECTION
PRIZM multi-well petrophysical application displaying a comprehensive unconven-
tionships of surfaces. The operator can then create accurate subcrop truncations of underlying beds, and generate fault offsets and polygons automatically. This “geomodeling while interpreting” technique saves time and increases the accuracy of the interpretation. Once the reservoir is modeled and understood, a field drilling plan is created to target the most productive zones to minimize drilling cost and geologic risk. LMKR Field Planner and Well Planner work together to develop multi-pad, multi-slot field plans quickly and then subsequently design a mechanically drillable well plan to provide the drillers with the most accurate targeting possible. LMKR GeoGraphix is proud to be working closely with this aggressive U.S. operator to be a key partner in their ongoing success. This working relationship between the two companies benefits both parties. The operating company benefits by receiving the tools and techniques that they need to successfully explore and exploit the Mississippian reservoir. LMKR benefits from the feed-back they receive from the operator to build better applications and methods for them in particular and the industry as a whole. *** For LMKR GeoGraphix in Europe, contact Greg Godlewski, grzegorz.godlewski@cleantechpoland.com +48 883 307 178
tional reservoir analysis.
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A License to Wait When is a onshore licensing round not a licensing round? When it is carried out in the UK and the successful companies are told in no uncertain terms that it is up to them to convince the licensing boards that they can exploit the shale resources underneath. BY S. R. SCOT T IN LONDON
24 | SHALE GAS INVESTMENT GUIDE | WINTE R 2 015
THE UK 14TH Onshore Oil and Gas Licensing Round was launched on 28 July 2014 and closed on 28 October 2014. A total of 95 applications were received from 47 companies covering 295 Ordnance Survey Blocks. In August this year, the UK completed a part of the round, awarding 27 blocks to a number of companies (see page 27). A degree of interest was expected. Over the last four years interest in shale gas exploration has piqued as onlookers witnessed the so-called shale gale blowing through the US - and the money made on the back of it. Although there are wildcat ventures listed among the 27, the majority of the companies awarded areas in the first tranche of the round have partnered with other companies. Most of the potential licensees hold existing exploration rights. IGas, Cuadrilla, INEOS, Total and GDF Suez are among those who scooped rights to explore, and the blocks are situated close to existing rights in some cases.
IGas holds the majority of the areas, with seven in total. Five of these are in partnership with Total. Cuadrilla holds two of the new areas and Ineos three. Newcomers include Osprey, ADM, Blackland Park and Warwick Energy. Companies approached by the Shale Gas Investment Guide were rather tightlipped about any concrete plans to begin the licensing process.
“We expect to drill the first exploration well in 2017” Paul Barrett, OK Energy Even established company Cuadrilla Resources was reluctant to put a timescale on operations. “For the next year activity in these exploration licence
EXPLORER
UK 14TH ONSHORE LICENSING ROUND: FIRST TRANCHE AWARDS 27 Blocks offered in first tranche
Aberdeen
132 Blocks still to be awarded Glasgow
Belfast
IRELAND
Liverpool
Manchester
Birmingham
London Bristol
SOURCE: UK OIL AND GAS AUTORITY 2015
The real scale of corporate interested in UK shale gas exploration will be clear by end of 2015.
areas will largely center on desktop studies and join some cases carrying out seismic surveys,” Cuadrilla Resources said.
“Our first priority will be to talk with local communities,” Francis Egan, CEO, added. “We recognize that some members
of the public will have concerns and there continues to be a good deal of misinformation circulated regarding onshore shale exploration,” Mr. Egan added. Some companies were more direct about their plans. “If we get licenses early next year, we’ll first carry out seismic research on them, including getting new data and reprocessing old data, roughly throughout 2016,” Paul Barrett of OK Energy, which will operate on a block SD61 in partnership with Osprey Petroleum and Energy Development and Investments, told the Shale Gas Investment Guide. “We expect to drill the first exploration well in 2017,” Mr. Barrett added. Analysts meanwhile say that shale gas production of any discernible volume is five years away. “We don’t think we will see any shale gas produced in this country at any kind of volume to talk about in the next five years,” John Williams, Senior Principal at Poyry Management Consulting told the Shale Gas Investment Guide. SUPPORT FOR NEW COMPANIES As shale gas exploration is - in the UK at least - a relatively new method of exploiting reserves, there is only a small
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service industry for the companies wishing to bring fracked gas to the market. This means that any kind of infrastructure will have to be built by the companies themselves. “There’s currently no service industry to speak of, there are some onshore drilling companies and some onshore drills that have taken place, but the service industry doesn’t yet exist anywhere near the scale needed,” Mr. Williams said. However, there not being a service industry also means that there is an enormous benefit to UK industry in building one. A report commissioned by UKOOG (onshore oil and gas trade body) and carried out by EY (formerly Ernst and Young), a consultancy, showed that developing an industry could amount to a spend of £33 billion (€46.3 billion) in the next 15 years. “The study shows that the shale industry will need to purchase 12,600 km of underground steel casing (…) with a total spend of £2.3 billion (€3.2 billion). In addition, we will need to purchase some 50 landward rigs and some workover rigs at a total cost of £1.6 billion (€2.2 billion), 9 m ton of sand and will require some £1.2 billion (€1.7 billion) of ancillary equipment and services,” Ken Cronin, CEO of UKOOG outlined. Despite the positive report, Mr. Williams maintains that there have been several recent blows to the burgeoning UK shale gas industry. “Those support services are only really going to be developed if we are going to produce some shale gas in the UK - and I think this is less likely now than if you asked me a year ago”. That said, companies in Poland saw a relatively stable demand for their services between 2009 and 2014, even when there wasn’t any produc26 | SHALE GAS INVESTMENT GUIDE | WINTE R 2 015
tion from shale, just work on seismic data and drilling and stimulation of exploration wells. In the UK, however, exploration has been trudging along a much bumpier road. The most recent blow is of course the recent refusal by Lancashire County Council to allow Cuadrilla to frack for gas at its Preston New Road site. The refusal was granted despite recommendations from planning officers that permission be granted and has led to allegations that the council was bowing
IT’S THE ECONOMY, STUPID The slump in oil and gas prices is also a concern. “Volatility in oil markets and the growth of unconventional gas supply have created a high degree of uncertainty about future gas demand and the direction of gas prices,” a recent report by industry analysts Wood Mackenzie said. According to futures exchange ICE, future UK gas prices, that is, the price of UK gas sold on the OTC market in Winter 2016, 2017 and 2018, are expected to be flat to the levels seen
“The [UK’s] shale industry will need to purchase 12,600 km of underground steel casing, 50 landward rigs, some workover rigs, nine million ton of sand and ancillary equipment and services” Ken Cronin, CEO of UKOOG to pressure from environmental groups. Cuadrilla said that it “remained commited” to exploring for gas in the shale rock under Lancashire, but it has to wait as long as 12 months to appeal. INEOS’ experience in Scotland whereby the Scottish government has announced a moratorium on fracking after INEOS purchased blocks for exploration, was another blow to the industry (see page 30). Another negative concerns the 14th licensing round, Mr. Williams explained, as no blocks were awarded, rather the round awarded areas to the companies and each of the 127 blocks would be subject to further environmental review. “There doesn’t seem to be many positive indicators in the industry at the moment,” Mr. Williams said.
today. While this may not be alarming to some, it means that the market believes that winter gas prices will not move much compared to those experienced in October 2015, the first month of winter and at time when supply is good. That said, there is no data available on the cost of shale production in the UK. What is certain is that it is going to be higher than in the US, as there is no support industry, no experience on the ground and the regulatory framework costs. “Based on the analysis we’ve done, we think that in the current market, with prices where they are, now it would be difficult for shale gas to be produced economically,” Mr. Williams said. “The forward curve [in the UK gas market] is at around 50p/th (therm)
EXPLORER
14TH ONSHORE LICENCE ROUND FIRST TRANCHE BLOCKS BY OPERATOR Operator
Block
Partners
ADM
SK86c
Milroy Capital, Aberdeen Hydrocarbon Development
ADM
SK96
Milroy Capital, Aberdeen Hydrocarbon Development
AURORA ENERGY
SD62
-
BLACKLAND PARK
SK87b
-
CIRQUE ENERGY
TF06
CIRQUE ENERGY
TF07e
Swift Exploration, Stelinmatvic Industries, Swift Exploration, Stelinmatvic Industries
CIRQUE ENERGY
TF07f
Swift Exploration, Stelinmatvic Industries
CIRQUE ENERGY
TF17
Swift Exploration, Stelinmatvic Industries
CUADRILLA RESOURCES
SE40f
-
CUADRILLA RESOURCES
SE95
Gdf Suez E&P UK
EGDON RESOURCES
SK52a
Hutton Energy, Coronation (Oil And Gas) , Petrichor Energy UK, Celtique Energie Petroleum
EGDON RESOURCES
SK53
Hutton Energy, Coronation (Oil And Gas) , Petrichor Energy UK, Celtique Energie Petroleum
GDF
TF36
-
HUTTON ENERGY
SE42e
Coronation (Oil And Gas)
HUTTON ENERGY
SK72a
Coronation (Oil And Gas)
IGAS
SK49
Total E&P UK, Egdon Resources UK
IGAS
SK87c
Total E&P UK, Egdon Resources UK
IGAS
SK88b
Total E&P UK, Egdon Resources UK
IGAS
SK89e
Total E&P UK, Egdon Resources UK
IGAS
SK99a
-
IGAS
TF18b
-
IGAS
SE41e
Total E&P UK, Egdon Resources UK -
INEOS
SK45
INEOS
SK48
-
INEOS
SK58a
-
OSPREY
SD61
Ok Energy (Onshore) , Energy Development And Investments UK
WARWICK
SK43
Anglia Natural Gas
Perhaps the best indicator of interest in shale gas exploration in the UK is the fact that a number of new companies submited applications. This bodes well for exploration in the next 12-18 months. SOURCE: DEPARTMENT OF ENERGY AND CLIMATE CHANGE
[EUR 0.7/th] - we think that’s just above the bottom range of where shale can be produced economically, however until we have a better idea of how much gas can be produced from UK shale there is a great deal of uncertainty around production costs,” Mr. Williams said. However, gas markets fluctuate. Demand is higher than average as it is
colder than historic norms. Analysts at the Met Office did explain that temperatures so far this year have been lower than predicted. In September the provisional UK mean temperature was 11.9 °C, which is 0.8 °C below the 19812010 long-term average, meaning of course, that demand this October could be higher than expected. Supply meanwhile is robust at this
time of year. Gas storage is usually close to full, having been propped up by a summer of injections, when the price of gas is lower. It is far more sensible to buy gas at a low price in the summer and store it in one of the storage facilities for a rainy day (or at least a colder-than-average day) when the price on the spot market is higher. Storage gas notwithstanding, popular rhetoric has centered around the UK’s need for a diversified supply mix. North Sea gas fields are maturing and so the country’s needs have been met over the last seven years using pipeline gas from Norway and Europe, stored gas and liquefied natural gas (LNG) imported from all over the world. Indeed, the UK government has placed a great deal of importance on securing supply and on updating the country’s aging infrastructure. Between 2010 and 2014 an equivalent of €1.38 billion was invested in gas storage and import infrastructure, and €414 million was put into ensuring the safety and reliability of the National Transmission System. Furthermore, the government has rolled out a Gas Network Innovation Competition which offers up to €24.8 million per year for gas network companies for the development and demonstration of new technologies. This gives a background of support for the shale gas industry, at least theoretically, and it’s clear to see why there is interest in exploiting the UK’s vast shale reserves. On paper, there is ample demand, a desire to secure domestic energy supply and support from the government. But this is an industry in its infancy. In order to come to fruition skills will need to be learned, an infrastructure will have to be built and the planning process will have to be reviewed.
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Never Mind the Oil Price We asked the CEO of IGas, one of the most active companies in the UK shale gas industry, about the impact of the 14th Licensing Round on the domestic industry, which though still fledgling could become Europe’s first to produce shale gas in commercial quantities. BY WOJCIECH KOŚĆ
28 | SHALE GAS INVESTMENT GUIDE | WINTE R 2 015
IGAS IS ONE of the frontrunners in the potential shale gas boom in the UK. The company has recently been re-awarded seven blocks, on which it will explore once all formalities are finalized with the UK’s Oil and Gas Authorities. However, the impact of the licensing round extends way beyond the administrative process in which companies apply to get a mere piece of paper from the government, says IGas’s CEO Stephen Bowler. It also has the potential to give the UK shale industry the kick it has long badly needed since exploration stalled, he believes. Firstly, the licensing round’s importance lies in the simple fact that it has attracted interest. A total of 95 applications have been received from 47 companies covering 295 Ordnance Survey Blocks. In August 2015 the UK completed the round, awarding 27 blocks to various companies, including seven for IGas (for a separate story on the licensing round, see page 24). “The 14th licensing round has provided companies and investors with the confidence required to realise the significant opportunity to produce home-grown oil and gas and help secure Britain’s energy needs for the future,” Mr. Bowler told the Shale Gas Investment Guide.
That future is still some way away, with the company not yet fully up to speed on its existing concessions in North West and East Midlands, or across the Bowland shale that is speculated to be home to over 30,000 billion cubic meters (BCM) of gas. “We will be putting an application in for a site in the East Midlands of England imminently, and are currently acquiring 3D seismic in the North West with a view to identifying further sites for exploration and appraisal,” Mr. Bowler said. Like other companies about to be granted licenses in the 14th licensing round, however, IGas has yet to announce its exploration strategy on the new acreage it has successfully applied for. “It is too early at this stage to know when or where the first wells will be drilled. We are awaiting the second tranche before we will be able to determine our primary targets and begin making more specific operational plans,” Mr. Bowler said. IT CAN MAKE ECONOMIC SENSE One hindrance to rolling out a more specific exploration program is, at least in part, the unfavorable economic environment for gas. With the price of oil hovering at about $50 per barrel (Brent), unconventional exploration is
IGAS
EXPLORER
IGas CEO Stephen Bowler: We believe that shale gas in the UK will be economic
not so attractive, as evidenced by the stalling effort in Poland - even if geology has also played its part there - and Romania. Mr. Bowler is however one of few executives in the shale gas business these days that likes to downplay the impact of the low oil price on his business. “Gas prices in Europe have not fallen as significantly as the oil price, and remain significantly higher in Europe than, for example, in the US. We believe that shale gas in the UK will be economic in this gas price environment but requires further data,” he said. In order to reduce the risk of becoming caught between the high cost of exploration and falling gas prices, the company has also embarked on carrying out a cost-cutting program, Mr. Bowler says. “We have responded to the changing oil price environment. We have reduced the costs of running our business without compromising safety, commitment to the environment or performance of our operations,” he said. “These measures will lower our net operating costs and S, G&A (selling, general and administrative) charges to below $40 per barrel for the year to 31 March 2016, excluding reorganisation costs,” Mr. Bowler said. Industry observers note that the interest shown by companies in this li-
censing round, as well as the ability to handle the economics of shale gas exploration in an environment of low oil prices, may mean the UK does finally spawn a functioning industry. The
“We will be putting an application in for a site in the East Midlands [of England] imminently, and are currently acquiring 3D seismic in the North West with a view to identifying further sites for exploration and appraisal” Stephen Bowler, CEO, IGas geology is thought to be world-class and the government, Mr. Bowler claims, has finally become active in helping companies like IGas.
The UK government has now given itself new prerogatives to step in if local councils prolong decisions on fracking applications, a practice that has plagued exploration in the UK, with firms like Cuadrilla Resources the best known example. “We very much welcome this step by the government in both giving shale gas ‘national priority’ status and providing clarity on the timetable for determining planning decisions,” Mr Bowler said. Wary, however, of how sensitive the question of exploration is with local communities, he is quick to add that the company would take care not to go over the heads of the locals, even if armed with legislation from Westminster. “We remain focused on building strong, sustainable relationships and becoming a trusted part of the communities in which we operate. We believe that supporting and sustaining these communities is fundamental to delivering more domestic production and maintaining our social licence to operate,” Mr. Bowler claims. Whether IGas’s exploration will pan out should be clear during 2016 and 2017 when the company - like others involved in the licensing round - will likely start more work on the ground, including exploration drilling.
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S C O T L A N D ’ S M O R AT O R I U M
Hitting the Wall Contrary to claims the Scottish moratorium on fracking is only a delaying tactic before local politicians let it go ahead full steam, it is here to stay because the Scots want it so. S. R. SCOT T IN LONDON
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THE LAST 12 MONTHS have been tumultuous in Scottish politics - probably the most tumultuous on record for some time. While the world waited to see the outcome of the devolution vote last September, another equally divisive topic has been debated behind closed doors, culminating in a “not-right-now” vote. The topic in question is the moratorium on fracking, announced in January by the Scottish minister of energy Fergus Ewing. In fact, this was not a moratorium strictly on fracking, but one on licensegranting, so as to allow time for more research and a public consultation on the controversial technology. The moratorium wrecked plans of INEOS Upstream, chemical giant INEOS’ oil and gas exploration subsidiary, to explore for shale gas in Scotland in order to secure gas as raw fuel for its refinery in Grangemouth. The company has been campaigning to change popular attitudes to fracking that prompted the politicians to insti-
tute the moratorium. But claims the campaign has been on because the moratorium will be short-lived are refuted by Scottish decision makers. GET THE FRACKING FACTS INEOS is keen to start exploring for shale gas in West Lothian. The company’s campaign has seen the company release a series of films called “The Fracking Facts” to the public which explain how shale gas extraction works and outlines the benefits to the local community. INEOS also published editorials in local newspapers and even attended the annual Scottish National Party (SNP) conference in Aberdeen in October. “The Scottish government wants the public to be fully informed about shale gas production and we are determined to help,” Gary Haywood, CEO of INEOS Upstream said, following the moratorium. “We are launching Scotland’s biggest shale gas information program to make
MARKET
“Sadly there has been much misinformation put out about shale gas. People are surprised when I tell them the Scottish Government’s own expert panel concluded that shale production is safe if best practice is followed”
sure that local communities get the chance to hear the facts rather than the myths about shale gas,” he added. “We have found they [the people met] are engaged by this issue. Some are passionately opposed and some are passionately in favor because they see the potential economic and social benefits. Most simply don’t know but they all say they want to be reassured on safety,” INEOS shale operations director Tom Pickering said. During the SNP conference, Mr. Pickering explained that there was still a lot of misinformation regarding fracking and safety. “At the public meetings I have attended people come to me and highlight safety concerns they have read about on the internet,” he explained. “Sadly there has been much misinformation put out about shale gas. People are surprised when I tell them the Scottish Government’s own expert panel concluded that shale production is safe if best practice is followed,” Mr. Pickering added. The expert panel’s conclusion must have been one of the reasons for which the autumn has seen reports that the moratorium is simply a “delaying tactic” by the ruling party - the SNP - before there is a vote in favor of fracking. These accusations have come from the Labor opposition and appear to be baseless, although not entirely. An effort to remit the moratorium back for revision was narrowly defeated at the SNP conference, by 427 votes to 554. However, speaking to reporters on the sidelines of the conference, SNP MP Tommy Sheppard maintained that the SNP would not be swayed by a INEOS’ PR campaign.
“They [INEOS] would be deluded if they think a slick PR campaign can answer the serious objections that have been raised about fracking - and serious questions have been raised about scientific and environmental grounds,” Mr. Sheppard said. Green Party MSP (Member of the Scottish Parliament) for Lothian, Alison Johnson, says Scotland does not need to exploit Scotland’s shale reserves. “The big businesses that make their money from drilling oil and fracking for gas would have us think that we have to choose between cutting back on emissions and building a prosperous economy – according to these corporations, there is no real alternative to the fossil fuel industry,” Mr. Johnson explained. “But people in Scotland are starting to realise that they are bluffing. The oil barons are simply trying to secure profits for themselves, while pretending that they’re doing our society a favour,” she added listing “renewables, decommissioning, sustainable forestry, home insulation” as these alternatives. Ineos continues to hold “town hall” and “open day” style meetings, with the next planned on December 2. However, with a recent online poll putting Scottish opposition to fracking at 67 percent, there appears to be a long way to go before the populace is convinced of the benefits. The benefits may be huge. According to the British Geological Survey (BGS), the range of shale gas in place in Scotland is estimated to be between 1,398 and 3,809 billion cubic meters (BCM), with the central estimate for the re-
DOLLARPHOTOCLUB
Tom Pickering, INEOS Upstream
source being 2,272 BCM. The range of shale oil in place is estimated to be between 3.2 and 11.2 billion barrels (bbl), with the central estimate for the resource being 6.0 bbl. On the back of those numbers, indicating production of shale gas on a large scale is very much feasible, Ineos has proposed a slice of six percent of its revenue from gas production to support coffers of local communities. In theory, lifting the moratorium could open the way for this money to flow in, but the political risk is too much at the moment.
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TURKEY’S AMBITIONS
Unexplored Potential Turkey’s oil and gas production is minimal compared to the growing needs of the 75-million country spanning Europe and Asia. New exploration in unconventional gas-bearing formations is expected to bring some clarity on how much domestic production Turkey can have, and when. B Y O Z A N S A G L I K I N A L A N YA
RECENT EXPLORATION activity in Turkey suggests it will be this large country spanning Europe and Asia that has the best chance to become the first unconventional gas-producing country in the region. Advanced Resources International (ARI), a consultancy, estimates that Turkey’s two most promising unconventional gas plays, the Dadas in the south-eastern Anatolian Basin and the Hamibat in the Thrace Basin contain 4,615 billion cubic meters (BCM) of risked shale gas in place, out of which 680 BCM is technically recoverable. Exploration in the Dadas and the Hamibat plays has been under way since 2011 by the state-owned Turkish National Petroleum Company (TPAO) and several international companies. Perhaps the lead exploration effort is coming from a joint-venture of Shell and TPAO, which completed the Konacık-1 32 | SHALE GAS INVESTMENT GUIDE | WINTE R 2 015
and Akçay-1 wells to test the Dadas play in 2014, with further activity pending on those wells’ results. The wells are part of a five-well exploration program with TPAO for the area, comprising five vertical wells, with more to come should Shell execute the option to increase its interest in the concessions. This might translate into a total commitment of 15 wells, including eight vertical, six horizontal and one re-entry well. The Dadas play is also home to exploration from Canada’s TransAtlantic Petroleum, which reported flowing gas and light oil from their two test wells, Goksu-1 and Bahar-1 in 2013. Finally, Anatolia Energy drilled its first Dadas evaluation wells, Caliktepe-1 and Caliktepe-2 to find light crude oil on their Bismil lease area in early January 2012. But Shell Turkey CEO Joris Grimbergen said earlier in 2015 it could be 7-10
years before commercial production was realized from the prospect, an estimate likely to apply to other current exploration areas. In the Thrace basin, Canada’s Valeura Energy acquired a position in the Mezardere, Teslimkoy, and Kesan formations in a joint-venture with TransAtlantic Petroleum, looking to unlock tight gas potential there. The jointventure has proved successful, with tight gas production already under way from 20 wells in the area. The fast tempo of moving on to production owes in part to low E&P costs in Turkey, with a tight gas well cost estimated by Valeura Energy at mere €1.78 million-€2.67 million. Turkey may also have shale gas resources in the Sivas and Salt Lake basins in the central Anatolian region. Only limited reservoir data are available for them, however.
“Turkey is largely underexplored” Lee Muncy, vice-president, TransAtlantic Petroleum TPAO and Shell also began an offshore exploration drilling project in January 2015 in the western part of the Black Sea. There also may be significant reserves under the Aegean Sea, but this has not been confirmed due to the ongoing territorial disputes with Greece. UNEXPLORED, DEPENDENT The exploration activity that has been rolling out in recent years, indicates that Turkey is “largely unexplored,” according to Lee Muncy, the vicepresident of geosciences at TransAtlantic Petroleum. The country has only seen 4,400 wells drilled since 1940 and its production is rather insignificant at close to 0.5 BCM, according to the Turkish ministry of natural resources and energy. At the same time, imports exceeded 49 BCM in 2014, a growth of 8.8 percent year-on-year. Currently, natural gas is being transported through the Blue Stream gas pipeline from Russia. A new pipeline,
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OFFSHORE RICHES Apart from shale and tight gas, Ankara is looking increasingly often to the potential of offshore reserves as future sources of Turkey’s oil and gas supply. The Black Sea might hold up to 10 billion barrels of oil and 1,500 BCM of gas, according to TPAO. To prove these estimates, exploration is ongoing from the state-owned company’s seismic research vessel Barbados hayreddin pasa.
MARKET
Located on the western part of the Turkish Black Sea coast, the Zonguldak coalfield is the principal hard coal field in Turkey. It is operated by state company TTK, which signed a contract to explore for coalbed methane (CBM) resources in the area with Hema Natural Energy Resources in 2005. Hema has drilled a number of wells on their license area and was intending further development over 2014 and 2015, according to US’ Environment Protection Agency (EPA). Zonguldak’s CBM potential is estimated at about 60 BCM, 10 BCM of which is recoverable.
the Turkish Stream, is being negotiated by Turkish and Russian governments. The planned capacity of the pipeline was 63 BCM per year, from which Turkey would take about 14 BCM, while the following 49 BCM would be carried on to European customers. But these figures have come TURKEY’S TIGHT GAS: NOT SO COSTLY Tight gas well cost (total) Drill and Case in Tight gas well (vertical) Single frack in Tight gas (Re-Entry Frac) Multi-stage frac (vertical) Tight gas well cost (horizontal) Drill and Case in Tight gas well (horizontal)
EUR 1.8 - 2.7 million EUR 0.4 - 0.7 million EUR 0.4 million EUR 1.2 - 1.3 million EUR 0.7 - 1.0 million EUR 1.2 - 2.3 million
Source: Valeura Energy Inc.
A breakdown of costs of a tight gas well in Turkey reveals spending on unconventional exploration does not necessarily bear excessive costs outside of the US.
into question recently. Gazprom’s CEO Alexei Miller said in early October Turkish Stream was now mulled to carry only 32 BCM a year, adding that halving of the capacity had “nothing to do” with Russia’s plans for the second line of Nord Stream pipeline through the Baltic Sea. Russia is covering 55 percent of Turkey’s gas imports, while Iran and Azerbaijan come are the second and the third largest suppliers, respectively. With a price tag of $20 billion (€182 billion) that Turkey paid for gas imports in 2014 alone, there is a growing awareness within Turkish political circles that dependency on energy produced elsewhere is too big. But Turkey is located in one of the world’s least stable regions, which is currently telling on the country’s exploration efforts in the south-east. There, increasing violence has been making exploration difficult, on the back of strained relationship of Turks with minority nation of Kurds, which has recently gained political representation in the Turkish parliament, for the first time history.
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SWEDEN
Small Resources are Big Game in Sweden Sweden has next to none confirmed resources of natural gas and its annual demand is only 1 billion cubic meter (BCM). But a relatively low cost of drilling owing to low reservoir depths is making even this small potential worth going after. BY WOJCIECH KOŚĆ
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some time to determine the area’s gas potential. The company is now working on its first production well at the Mora field in western Siljansringen, looking to finish it by early November. Siljansringen is the location of a meteorite impact from 377
million years ago, one of the Earth’s 18 largest known impact craters and home to Lake Siljan. Oil and gas exploration has been ongoing in the lake’s vicinity. According to analysis of the well’s early results carried out by the French Petroleum Institute, the gas from the well
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WHILE FAR FROM being gripped by gas fever, Sweden has not been backward in seeking to capitalise on its gas resources, small as they are. Swedish geology also affords certain key advantages, in particular, that most of the time companies exploring for gas do not need to drill deeper than 1,000 meters, with some areas offering gas potential at a mere 70-120 meters. With virtually no domestic production and demand of about 1 BCM annually, Sweden does not seem like a prospective gas market able to attract major international players. It may have enough gas, however, for local operators - like Igrene or Gripen Oil and Gas - to establish a profitable E&P business in the Nordic country. Both exploration companies want to establish themselves as suppliers of fuel for Sweden’s growing compressed natural gas (CNG) transport sector and local municipal heating networks. Igrene is a Stockholm-listed oil and gas company formed in 1994. It came out of an older company, Falun Paper. The company sits on 25 concessions, ranging from 0.4 to 170 square kilometers in the vicinity of Lake Siljan, and has been trying for
COURTESY OF DEREK YU/FLICKR
is high quality, with a methane level of 96 percent and negligible levels of undesirable gases. Typically for Swedish exploration the well has been drilled to a depth of only 700 meters, as compared to typical depth in Poland of at least 1,500 meters, thus reducing the cost. “If we are successful on that first well, we are going to drill nine more in the area,” Mats Budh, CEO of Igrene, told the Shale Gas Investment Guide during a phone interview from the Mora field. The company is financing its exploration program from the equity it raised via a share issue in April, which added about €890,000 to the company’s financial resources. Further south, in the region known as Östergötland, another exploration firm, Gripen Oil and Gas, is working on 21 concessions, ranging from 3 square kilometers to 614 square kilometers. The company is looking there to develop a high quality methane gas shallow project - with wells drilled to a mere 70-120 meters - where allo-
“Subject to permitting, we are hoping to get the production under way next year. The gas is very high quality, too, at 98% methane level” Stephen Crabtree, Gripen Oil and Gas cated contingent resources were estimated at as much as 1.4 BCM, or 40% more than the country’s recent demand. Although shallow, the target is known as Alum shale, making Gripen’s exploration essentially a shale gas operation, says company CEO Stephen Crabtree.
The company has drilled 17 wells on its key concession Ekeby, and Mr Crabtree says he is excited about what he describes as a “substantial flow rate” on one of the wells and “constant, albeit small” flows on other two. While he is concerned by the low price of oil, which has weakened the business case for gas exploration in Europe, Mr Crabtree believes once Gripen produces gas from Ekeby, Gripen will find a market for it. “We have an agreement with a company named AGA Gas to sell and market our gas once we produce it,” Mr. Crabtree said. “Subject to permitting, we are hoping to get production under way next year. The gas is very high quality, too, at a 98 percent methane level,” Mr Crabtree added. Production would certainly put Gripen on a much more solid financial footing, with income from sales supporting further exploration, which has been funded from equity raised by the company before the crisis hit the oil market.
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From Reject to Hit Once neglected and burned off, natural gas liquids (NGLs) like ethane look likely to be a US export hit. BY GABOR CHODKOWSKI-GYURICS
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AROUND 20 PERCENT of US natural gas production by volume at wellhead are the so-called natural gas liquids, or NGLs. They are naturally occurring elements such as propane, butane or ethane, the latter constituting the largest fraction. Once seen as secondary by-products, over time they have become valuable coproducts that could possibly give shale gas production a new dimension. The so-called “wet” natural gas resources, likely to contain up to 10 times higher NGL levels than their “dry” equivalents, tend to be significantly cheaper to exploit. Combined with their additional revenue potential, companies might orient future production toward NGLs. Shale gas, in particular, is rich in these liquids, and its rapid rise in the US resulted in a 60 percent surge in ethane extraction over past eight years, to 1.23 million barrels a day in 2014. According to Bentec Energy, analytics branch of Platts, US produc-
tion of ethane is bound to keep growing to reach 2.5 million barrels a day by 2024. Ethane is primarily used as feedstock for petrochemical industry, offering a significantly cheaper alternative to naphtha for ethylene production. The opportunity provided by the rise in supply of the US shale-based ethane can be measured by willingness of businesses to swap naphtha for ethane. Chemical giant Ineos spent over €600 million to enable its facilities in Scotland and Norway to import ethane, while within the US companies such as Dow Chemical, Westlake Chemical, LyondellBasell, Chevron Phillips Chemical, ExxonMobil and Shell have 16 projects underway for ethane crackers or ethane-enabled extensions to existing units. Yet, many gas producers do not try to recover ethane or simply stuff it into natural gas pipelines to be burnt, in a practice called rejection. Despite its high potential, ethane industry comes
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US SHALE GAS EXPORTS
TYPICAL NGL BARREL COMPOSITION
10-15% 10% 40-45%
5-10% 25-35%
normal butane
ethane
isobutane
propane
pentanes
SOURCE: MARITIME PROFESSIONAL
rels. Two more terminals, including Shady Grove, Louisiana are being planned. The Morgan Point facility, scheduled to begin operations in Q3 2016, has already tied over 80 percent of its planned capacity of 240,000 barrels a day to long-term contracts.
meters - and are deemed insufficient to reach necessary economy of scale. As of February 2015, the only ethanecapable ships on order with capacity over 70,000 cubic meters are the six VLECs (Very Large Ethane Carriers) built by Samsung for India’s Reliance
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with its own set of challenges to overcome. A combination of low oil prices over prolonged time and the shale revolution oversaturating the hydrocarbon market resulted in ethane prices in US dropping by 60 percent, to $0.20 per gallon (3.8 liters), trading below production costs. One way out of this situation is exporting to less saturated markets, such as India, Europe or East Asia. However, with ethane not being traditionally traded on global markets and with internal demand consuming nearly all domestic production capacity, US began building its ethane export capacity just two years ago, with late 2013 seeing a pipeline to Canada being built. Despite being built from the groundsup, US export capacity is growing rapidly. Bentec estimates it will reach 300,000 barrels a day as soon as 2017. Two export terminals - Marcus Hook, Pennsylvania and Morgan Point,Texas - are being built to make use of the cheap shale-based ethane, expected to provide an annual export capacity of more than 100 million bar-
MARKET
US production of ethane is bound to keep growing to reach 2.5 million barrels a day by 2024. It was 1.2 million barrels a day in 2014
However, most of these contracts were signed in 2014, with oil prices close to $100 per barrel. Current oil prices bring the price of naphtha much closer to that of ethane, prompting uncertainty over further expansion of the NGL market and dissuading companies from investment in yet another weak link of the nascent ethane market: shipping. Ethane is one of the most technically difficult gases to ship, requiring cooling to a temperature of -90 degrees Celsius. Of the existing gas-carrying fleet, only ethylene carriers are suitable for long haul, but due to historically small packages, they are small ships by today’s standards - some 70 percent of 160-odd ethylene carriers have cargo capacity not exceeding 10,000 cubic
Industries, the first of their kind in the world. The new fleet will allow the Indian conglomerate to ship 1.5 million tons of ethane annually from the Marcellus shale formation. Technologically speaking, VLECs are rather straightforward extensions of technologies already in use for LNG transport, but with cost in excess of $100 million (€90.8 million) per unit, speculative ordering is unlikely in current market. With the entirety of hydrocarbon market kept in uncertainty by the prolonged oil price plunge, a question remains for the fledgling global trade of ethane: will the investments of yesteryear prove enough to kickstart a new market?
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SHALE GAS
investment
GUIDE
COUNTRY
FEATURE
Middle East and North Africa
Having little water and - for the most part already well developed oil industries, Middle East and North African companies seemed uninterested in shale gas - until now CONTENTS
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l Morocco
p. 40
l Saudi Arabia
p. 42
l Algeria
p. 44
l Egypt
p. 44
COUNTRY
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WHO’S WHO
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MOROCCO
First Wells are Winners While dozens of wells in Europe have not yielded big enough gas flows even to allow thoughts of production, a mere handful of wells in Morocco have enabled their explorers to proclaim that production is the next - and immediate - step. BY WOJCIECH KOŚĆ
out known conventional oil and gas resources, although there is “reasonable evidence that there could still be important undiscovered oil (and gas) reserves [in Morocco],” the Italian Istituto Affari Internazionali (IAI) noted in 2015. According to IAI, Morocco might be home to as much as 339 BCM of shale gas and some companies appear to have got close to tapping these resources. Two exploration companies have hit gas in their shale exploration wells in
SHUTTERSTOCK
IF ONE RECALLS the very enthusiastic updates on exploration figures in Poland - where some wells (although few and far between) yielded gas flows of around 20,000 cubic meters a day - then exploration news from Morocco this fall would seem to have come out of the realms of fantasy. Only a handful of shale gas exploration wells have been drilled in Morocco to date. The North African nation is the only country in the region with-
40 | SHALE GAS INVESTMENT GUIDE | WINTE R 2 015
the country in 2015. London-listed independent oil and gas exploration company Gulfsands Petroleum reported gas flow to surface during the clean-up flow period on its DOB-1 well on the Rharb Center permit in northern Morocco at rates of over 280,000 cubic meters per day. The company has since suspended the DOB-1 as a future gas production well. The well was drilled to 1,140 meters, significantly less than any of the wells in Poland, European exploration leader suggesting Moroccan exploration should have the advantage of being less time-consuming and cheaper in comparison to Europe. Drilling operations in the Rharb Center permit took on average 20 days and cost on average of €1.85 million to drill, fully plug and abandon each well and restore it to the drill-site’s original condition. Gulfsands Petroleum carried out exploration programs on a mere four wells on the Rharb Center before reaching commercial gas flow levels. The company estimates the permit’s
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prospective resources at 636 million cubic meters. That is net unrisked and a best estimate, according to Explorer. Another London-listed independent, Circle Oil, which is operating in northern Sebou and Lalla Mimouna concessions, is also seeing exploration success. On the Lalla Mimouna concession in late June the company reported significant gas flows of 53,800 cubic meters per day from the LAM-1 well, the first well drilled by the company on the permit. On the Sebou concession, Circle Oil reported an even bigger flow of over 220,000 cubic meters per day in midNovember. The find quickly prompted the company’s CEO to talk of production. “The flow rates achieved during the well test are at the upper end of our range of expectations and the well will now be tied in to our existing infrastructure and put into production as soon as possible. This gas will be sold at fixed rates, which are not subject to oil price fluctuations,” Circle Oil’s CEO Mitch Flegg said in a statement.
“The flow rates achieved during the well test are at the upper end of our range of expectations and the well will now be tied in to our existing infrastructure and put into production as soon as possible” Mitch Flegg, Circle Oil Both the Sebou and the Lalla Mimouna permits are a partnership between Circle Oil’s local exploration vehicle Circle Oil Maroc, which has a 75% stake, and Morocco’s national oil
and gas company Office Nationale de Hydrocarbures et des Mines, ONHYM, at 25%. Discoveries by Gulfsands Petroleum and Circle Oil offer Morocco a chance to develop domestic gas production, which in turn would ease the pressure energy imports have on the country’s finances, even if that has eased recently, in line with costs of energy falling worldwide. However, should prices rebound, it will have a negative effect on the country’s deficit. Apart from Circle Oil and Gulfsands Petroleum, another Londonlisted independent, San Leon Energy, is also on the lookout for gas in Morocco. ONHYM and San Leon intend to apply jointly for an eight-year exploration licence, under which San Leon plans to acquire a 3D seismic survey before considering the option of re-entering an abandoned well or drilling a new well in the Tarfaya and Zag acreage. The company operates the acreage with ONHYM and PetroMaroc.
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SAUDI ARABIA
Saudis’ Shale Zugzwang To those lamenting the impact current low oil price has on gas exploration, it seems fairly clear Saudi Arabia chose to play an economic game of chicken with the upstart shale oil industry. So why are the Saudis trying to buy into US unconventionals? BY GABOR CHODKOWSKI-GYURICS
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That may only be an annoying limit to export capacity right now, but it is likely to snowball into a serious threat. Research reports of Citigroup and Chatham House independently reached the conclusion that, if current demand growth patterns continue uninterrupted, the country will turn into net oil importer as soon as in 2030s.
SAUDI GOVERNMENT
IN MARCH, the OPEC leader Saudi Arabia stepped away from its role as global oil price balancer and significantly increased its output in March to an already oversupplied market. The move was seen as an attempt to nip the US shale oil industry in the bud and protect the Saudi market share by starving out the development of competitive resources. But the oil giant itself has been getting ready to invest in the shale industry for a while now. The “war on shale” narrative may appear sound, but not all facts check out. At the time Saudi Arabia led OPEC to fully open the oil floodgates, state producer Saudi Aramco already had €9 billion earmarked for developing shale oil and gas extraction technology. Moreover, state-owned chemical giant Saudi Basic Industries Corp. (SABIC) was already trying to buy its way into US and Chinese shale industries - the markets Saudi Arabia is supposedly trying to destroy. With oil exports accounting for over 80 percent of Saudi Arabia’s revenue, the country is bound to fight tooth and nail to retain its global market share, which stands at over 10 percent cur-
King Salman: too many in one basket?
rently. However, there is a drawback to that strong position as well. The world’s largest oil exporter is also the world’s sixth largest oil consumer, with domestic demand already constituting a quarter of its production and growing by about 3.9 percent annually.
THE WASTEFUL RICH Despite being rich in oil, Saudi Arabia faces a natural gas shortage, which was traditionally dealt with by turning to oil to generate some 58 percent of kingdom’s power. However, the growth in Saudi Arabia’s energy consumption has been outpacing production growth since 1991, and at average growth of 7.5 percent in the past five years. Generous fossil fuel subsidy regime - second biggest in the world, after Iran - greatly increases car fuel demand as well. With petrol costing €0.11 at pump, and electricity price at €0.012 per kWh making most energy efficiency improvement measures greatly uneconomical, Saudi government found it most difficult to enforce them and curb wasteful energy use.
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The subsidy is as difficult to revoke as it is economically dangerous. Saudi regime operates on a “no taxation with no representation” rationale - tax exemptions, welfare payments and subsidies are government’s primary tools of ensur-
If current demand growth patterns continue uninterrupted, the country will turn into net oil importer as soon as in 2030s. ing acquiescence. Following the ousting of Egyptian president Hosni Mubarak in 2011, Saudi Arabia gave away €117.5 billion in wages, unemployment benefits and housing programs to stave off the influence of the Arab Spring. With patronage spending greatly hampering Saudi ambitions at reducing domestic oil consumption, the only remaining recourse is introducing new energy sources into the mix. The royal family is mulling carrying out a nuclear energy program, while solar power, apparently perfect for local conditions, has stalled at 12 MW. Then there is the perennial obstacle of state budget - kickstarting energy diversification inherently leads to
increased production costs, which further increases the subsidy burden. WATERLESS FRACKING And that is where cheap shale oil and gas resources come in. SABIC, which used to complain time after time that Saudi Aramco is not capable of providing it with enough gas, had in the past tried utilizing naphtha as feedstock, but in light of rising oil consumption woes and general cost-effectiveness, chose to go straight for the source of cheap natural gas liquids - the emerging ethane global market (read more on page 36). In April, the company signed an agreement with Enterprise Products Partners, operator of the upcoming Morgan Point export terminal in Houston, Texas, to buy feedstock for its petrochemical plants in US and UK, whose crackers were recently conSAUDI ARABIA OIL PRODUCTION AND CONSUMPTION BCM 15,000 12,000 9,000 6,000 3,000 0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Consumption Production SOURCE: BP STATISTICAL REVIEW OF WORLD ENERGY 2015
verted to take in US shale-based ethane. The kingdom itself could potentially hold world’s fifth largest shale gas reserves trapped in rich carbonate rock formations. According to Baker Hughes estimates, they could exceed 18 trillion cubic meters (TCM) of recoverable gas. Unlocking the country’s shale potential would do much to satiate its hunger for gas, but its development is currently stymied by technology. High costs of water in the region make both hydraulic fracturing and acidization techniques of well stimulation prohibitively expensive, especially in light of current gas selling price. A small pilot program is underway to develop a water-efficient way of cracking the carbonate formations open. The so-called Fishbones system proposes pumping acidic solution from a number of needles protruding from pipes. The needles are to extend about 12 meters in four directions, carving out tiny lateral tunnels in the rock and most importantly - use 95 percent less water than current hydraulic fracturing technology. Until a technological breakthrough emerges to unlock its own reserves, the Saudis are in a bind, in which cheap US shale is just as dangerous to their oil exports as lack of it. And with a possibility of Saudi Arabia being knocked out of the global market, it may turn out - contrary to the common knowledge - that it is in fact the oil, whose future depends on gas.
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ALGERIA AND EGYPT
They Might be Giants Unlike their North African peer Morocco, Algeria and Egypt have long had functioning oil and gas industries. They appear to have a difficult time changing their thinking to embrace the benefits of unconventionals. BY WOJCIECH KOŚĆ
tal terms, according to the US Energy Information Administration. ACTIVE ALGERIA In order to maintain dynamics of economic growth, the Algiers government is attempting to get shale gas exploration – and possibly production – under way. A recent report from the International Monetary Fund urged Algeria to engage foreign oil and gas companies more or face abrupt decline in production. Algeria appears to be doing just that, with a batch of new shale gas
concessions granted in 2014 to interested companies like Shell or Statoil. The country’s national oil and gas company, state-owned Sonatrach, has been active in drilling pilot shale wells since 2013, analyzing data to determine feasible productivity rates or the type of fracking best suited for geological conditions. Algeria is shale gas potential is estimated at 20 trillion cubic meters (TCM). The company plans to finish three horizontal wells for shale oil and gas in the Ahnet basin by the end of 2015.
WIKIMEDIA COMMONS
DESPITE HAVING ONE of the largest oil and gas reserves in Africa and the world, Algeria’s hydrocarbons production peaked in 2005 for gas and in 2007 for oil. This affected negatively the country’s export capacity, one of the important drivers of Algeria’s economic growth, with share of hydrocarbons in total exports expected to fall to 96.3 percent in 2018 from the 2014 figure of 97.8 percent, which might not be a large fall in percentage figures, but certainly one of several billion dollars in sheer capi-
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MIDDLE EAST AND NORTH AFRICA
Once the Ahnet pilot project will be completed, from 2016 to 2020 at least two pilot wells will be drilled in the Berkine and north Timimoun basins. But Sonatrach is by no means the only active player in Algeria. Spain’s Repsol is operating through Canada’s Talisman Energy on several concessions. The Dutch major Shell has a stake in the Timissit concession, where it is targeting shale gas reserves in partnership with Statoil and Sonatrach. For their part, Statoil began shale exploration in Algeria in the last quarter of 2014. The company plans to drill two wells on the Timissit concession by the end of 2017 latest. Finally, France’s major Total claims it will launch production off its acreage on Ahnet and Timimoun concessions, where it is targeting shale as well as tight gas, alongside conventional resources. The company believes the Ahnet basin might produce at least four billion cubic meters (BCM) a year. TRICKY IN EGYPT While shale gas exploration in Algeria is moving forward, even if slowly, the future of the unconventional industry in Egypt just got tricky. Egypt is the second-largest dry natural gas producer in Africa, with vast reserves both onshore and offshore, as well as an important transit route for oil shipped from the Persian Gulf to Europe and to the United States. The country has recently seen its ambitions to become a regional gas power receive a major boost - although one that may end shale gas exploration before it has a chance to take off for good.
WIKIMEDIA COMMONS
Just as Egypt’s domestic gas demand started eating into exports, from which gas has begun to be redirected to cover internal demand, Italy’s ENI discovered an estimated 850 bcm of gas off Egypt’s Mediterranean Sea coast
Just as Egypt’s domestic gas demand started eating into exports, from which gas has begun to be redirected to cover internal demand, Italy’s ENI discovered an estimated 850 BCM of gas off Egypt’s Mediterranean Sea coast. Should ENI strike an agreement with the Cairo government - which has a history of putting off oil and gas companies - Egypt’s domestic demand will be met easily, with excess gas destined to boost exports again. However, this large new supply of gas may hinder shale exploration, currently led by Royal Dutch Shell and US explorer Apache in cooperation with the Egyptian General Petroleum Corporation (EGPC). Shell and Apache are jointly investing to develop shale oil and gas reserves in the Al-Obayyed field in the Appolonia Basin. The EGPC and Shell have agreed
to allow Khalda Petroleum, a JV between Apache and the EGPC, to operate the pilot project and full field development. Reservoir modelling carried out by Khalda Petroleum has suggested that horizontal drilling and multistage fracture stimulation will yield economic production rates. The pilot project, which began in mid-2015, includes a commitment of $30-40 million (€27-36 million) for three wells. Construction works of surface facilities started in September and will last until December 2015, while the first well will be linked to the facilities by the beginning of January 2016. Apache is confident production will begin soon from the Al-Obayyed field and it has price negotiations under way with the EGPC.
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ENVIRONMENT
Recultivation What Happens After a Well Site is Abandoned? Cleantech provided consulting services to the General Directorate of Environmental Protection (GDOŚ), under contract with Deloitte to write environmental practices for shale gas E&P. BY PA R K E R S NYD E R
DURING THE INVESTMENT process, both operators and government officials need environmental guidelines to interpret laws and regulations. Recultivation, for instance, is required of all operators who leave well sites after gas is produced during pro-
the site is reclaimed to its former condition. Why is reculvation important? In the United States, in North Dakota, in rural areas that had been widely developed, operators have had to abandon well sites as the oil price has fallen. Those operators that have gone into
During reclamation process an operator should set a goal - as precise as possible to restore physical and chemical properties of the soil” Tomasz Palak, Cleantech expert duction or if a well is deemed to be non-commercial during exploration. What follows is an overview of recultivation, the process whereby a well is plugged and abandoned (P&A) and 46 | SHALE GAS INVESTMENT GUIDE | WINTE R 2 015
liquidation have not been around to re-cultivate the site, leaving the state of North Dakota in the unenviable position to locate well sites that aren’t even geo-located. Recultivation therefore
only makes sense if it begins in the planning stage, before construction of the well pad even begins. Fortunately, the situation in Europe including Poland is much different. Environmental regulations are much stricter and wells sites are much better described in documentation related to geological works plans. Wells must be pinpointed with geo-coordinates so they can be located in the future. Cleantech’s expert Tomasz Palak worked for three years recultivating well sites in Poland, including for Chevron Polska. “During the reclamation process an operator should set a goal - as precise as possible to restore physical and chemical properties of the soil,” Mr. Palak said. Foremost, according to the visual schematic (on the right), which was produced by Cleantech in cooperation with visual architect Krzysztof Szozda, the well is plugged and abandoned. The
R E C U LT I VAT I O N A F T E R E X P LO R AT I O N H A S F I N I S H E D
ENVIRONMENT
BEFORE
CROSS SECTION
AFTER
TOP SOIL REMOVED PLANTS RETURNED TO SITE SUBSURFACE
WATER AQUIFER CONCRETE PLATE WITH WELL MARKER BED ROCK
CEMENT
WELL MUD
CEMENT
TARGET ZONE
BRIDGE PLUG
CEMENT
Recultivation is the process of returning a well site to its original condition. The well is cut, capped and abandoned - at a depth of
some two meters. Topsoil is returned to the well pad and vegetation planted. The site should return to its original condition, as good or better than it was before the operator commenced investment activities.
borehole is filled with concrete, and bridge plugs are put in place, with the well head cut off and capped at a depth of approximately two meters beneath the surface of the earth. “At every stage of demolition works, an operator should pay particular attention to cleanliness and accuracy of work execution,” Mr. Palak said. All construction elements are removed, including concrete floor plates and gravel covering the earth. The topsoil, which was earlier pushed aside, is returned to its original placement.
Vegetation is re-planted and grass is re-grown. The end result is the site looks as good or better than its original condition. If necessary, the site is monitored for any long term environmental impact, such as methane migration. Recultivation has a social element as well. Communities may have become emotionally and physically invested in the operator’s success. One independent operator in north Poland in the Baltic Basin was disappointed to have “let the community down” after having
to plug and abandon a well site. A farewell to the community, such as a letter in a local newspaper or a community meeting to explain decision, is therefore a recommended best practice. The process of obtaining a decision declaring the reclamation to be complete is quite time-consuming and depends on many factors such as inconvenient weather and deadlines by which the authorities consider cases. The operator must reckon the fact that it can take anywhere from a few to over a dozen months to be complete.
W W W.CLEANTECHPOLAND.COM
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SOUTH AFRICA
Backtracking on Fracking South Africa comes on board of shale gas exploration, having worked out regulations for the process, with companies already waiting for licenses, ready to spend millions. B Y C H R I S WA L D B U R G E R I N T H E N ATA L P R O V I N C E
IN A RARE EXAMPLE of a country backtracking on a moratorium on hydraulic fracturing, the South African government lifted a previously instigated ban on the technology, making an important step towards start of shale gas exploration in the country. The interest from exploration companies is evident already. The moratorium was declared in 2011 and then lifted in the following year, as the government announced regulations were needed to govern exploration. In early June, final regulations were published in the government gazette by the Minister of the Department of Mineral Resources, sparking interest from oil and gas companies. Bundu Oil and Gas, a subsidiary of Australia’s Challenger Energy, and Royal Dutch Shell, along with Falcon Oil and Gas, in collaboration with Chevron, are the first applicants for exploration rights in the Karoo Basin, a vast wilderness area which, according to the United States Energy Information Administration (EIA), may con48 | SHALE GAS INVESTMENT GUIDE | WINTE R 2 015
tain 390 trillion cubic feet (over 11,000 BCM) of shale gas. A recent contender is reportedly Texas-based Rhino Oil as well. According to the department of mineral resources, applications from Bundu, Shell, and Chevron were signed off in late September, with then Minister, Ngoako Ramatlhodi, stating that assessment of the applications’ compliance with the new regulations would still take some time to finalize. South Africa has used the standards of the American Petroleum Institute to regulate exploration. They prescribe requirements that must be met before permits and licenses are granted to explore and begin production. Applicants will have to acquire independent reports on the geology and geohydrology as well as study impact on water resources within a three kilometre radius of the furthest point of horizontal drilling. Risk assessment, casement of wells, management of waste and fluids, remedial action of pollution, target zone limitations and
day to day management of compliance will all rest with the licence holder. GAME CHANGER? The question is, however, how stringently these regulations will be enforced. Mr. Ramatlhodi, the minister responsible for the regulations, was in late September shifted to the Department of Public Services and Administration, with a relative political novice, Mosebenzi Zwane assuming his post. Some South African officials are convinced the regulations will only speed up exploration, offering the country’s a chance for a substantial domestic production of fuel and reindustrialisation. “Not only does the potential of shale gas exploration and exploitation provide an opportunity for us to begin production of our own fuel, but it also marks the beginning of the reindustrialization of the South African economy,” said former minister of natural resources Susan Shabangu in 2013.
SOUTH AFRICA GOVERNMENT
MARKET
President Zuma believes fracking will be a game changer for South Africa’s economy
“We have committed to the Government we would drill six wells [at a] cumulative cost of EUR 135 million to EUR 181 million” Jan-Willem Eggink, Royal Dutch Shell Coupled with President Jacob Zuma’s statement in 2014 that fracking will be “a game changer for the South African economy” it seems likely exploration and production will soon go ahead. There has been some question, however, about the commercial interest in fracking, particularly with the cheap oil prices globally. Shell, as the major player, may be a bellwether in this regard. The general manager of Shell’s upstream interests in South Africa, Jan-Willem Eggink, has gone on record about his company’s commitment. “We have committed to the Gov-
ernment that if we could get the licenses, we would drill six wells. The cumulative costs that we’ve made by the end of these six wells would be in the order of €135 million to €181 million,” Mr. Eggink told South African website Biznews in late 2014. At the same time, Mr. Eggink has been speaking about “managing expectations” as the existence of shale gas has not yet been confirmed. Some industry insiders have also suggested that the applicants are quietly readying themselves for when fracking becomes more profitable, and when government begins to streamline the process.
(TOO) FAST FORWARD But, as in many countries across the world, there remains some serious opposition to shale gas exploration in South Africa as well. The leader in this regard is Treasure Karoo Action Group (TKAG), headed by Jonathan Deal. Mr. Deal has been vociferous in his opposition to the new regulations. “While the department of environmental affairs heads up a two-year strategic environmental assessment [SEA] into fracking in South Africa, the Department of Minerals is rolling forward with its plans to issue exploration licences before the results of the SEA are released. This is counter-intuitive and ignores precedent,” he said. Mr. Deal referred to the SEA being underway by the departments of Environmental Affairs, Science and Technology, and Mineral Resources, in collaboration with various scientific bodies. There is also concern that the ruling party has a stake in Shell SA through its investment vehicle, the Batho Batho Trust, making it, according to Mr. Deal, both “player and referee” in its regulation of fracking in South Africa.
W W W.CLEANTECHPOLAND.COM
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SHALE GAS
investment
GUIDE
COUNTRY
WHO’S WHO
Explore Your Market Volume 10 of the Shale Gas Investment Guide marks a change in our approach to informing our readers’ intelligence on unconventional E&P. In this section, you will find a sample of what we are publishing quarterly in our subscription data service, EXPLORER. In order to satisfy demand from our readers and clients, we have also expanded the scope of our coverage. EXPLORER covers unconventional and conventional onshore gas in Europe and North Africa. Market sentiment is a mixed bag. On the one hand, there is proven interest in shale gas acreage in the UK, and explorers in Morocco hit shale gas astoundingly quickly compared to Europe and are already talking about production. On the other hand, the European gas market in general remains sluggish, pounded by low oil and coal prices, while Europe’s maturing fields including the North Sea are producing less and less. To find out more on what is going on in gas exploration in Europe and North Africa, subscribe to EXPLORER by writing to Parker Snyder at parker@cleantechpoland.com or +48 517 469 881.
COUNTRIES
50 | SHALE GAS INVESTMENT GUIDE | S E A SO N 2 0X X
l Algeria
p.52
l Morocco
p.52
l Poland
p.53
l Sweden
p.54
l Turkey
p.54
l UK
p.55
l Ukraine
p.55
COUNTRY
DOLLARPHOTOCLUB
WHO’S WHO
W W W.CLEANTECHPOLAND.COM
| 51
ALGERIA, MOROCCO
CONTACT INFO
Mari Thjømøe - IR Forusbeen 50, 4035 Stavanger, Norway (+47) 90 77 78 24 email: marthj@statoil.com
MONTE NEGRO
ANDORA
KOSOVO
COMMENT: Statoil entered shale gas exploration in Alge-
ria in Q4 2014 to test prospective commerciality. The first exploration phase is expected to last up to 2017 and includes seismic acquisition and drilling of two wells. Statoil is the Timissit license operator with 30% equity. The other two partners are Royal Dutch Shell with 19% stake and Algerian state-owned Sonatrach with 51% interest.
CONCESSIONS AREA
CONCESSIONS HELD
MACEDONIA
ALBANIA
GREECE
Name
Acreage (km2)
Wells
Timissit
2730
-
PORTUGAL
SPAIN
Annaba
Algiers Oran
TUNISIA
MOROCCO
Ghardaia Oran
LIBYA
WESTERN SAHARA MAURITANIA
Tamanrasset MALI
Zone of interest Concession area
- Cleantech
NIGER
CHAD
CONTACT INFO
Philippe Guys, 2, place Jean Millier La Défense 6, 92078 Paris La Défense Cedex, France tel.: (+33) 1 47 44 58 53
MONTE NEGRO
ITALY
ANDORA
KOSOVO
COMMENT: France’s Total expects the Ahnet basin to
“produce at least four billion cubic metres of gas a year. The production is likely to start in 2017, according to the company. Unconventional exploration is also taking place in Timimoun license.”
CONCESSIONS AREA
CONCESSIONS HELD
MACEDONIA
ALBANIA
GREECE
Area (km2)
Wells
Ahnet
17358
-
Timimoun
6992
-
Name
PORTUGAL SPAIN
Annaba
Algiers Oran
TUNISIA
MOROCCO
Ghardaia Oran
LIBYA
WESTERN SAHARA MAURITANIA
Tamanrasset MALI
Zone of interest Concession area
- Cleantech
NIGER
CHAD
CONTACT INFO
Circle Oil Plc
Mitch Flegg - CEO 2 Rue Ghzaoua Souissi La Pineped,10000 Rabat, Kingdom of Morocco tel.: (+353) 61 319366 info@circleoil.net
ANDORA
COMMENT: 2D and 3D seismic surveys have been conducted
over the majority of the Sebou Concessioin and 3D over 158 m2 of the Lalla Mimouna Nord area. The company reported in late June a significant gas flows of 53,800 cubic meters per day from Moroccan shales. In October, Circle Oil reported another significant flow of 226,500 cubic meters per day from a well on the Sebou license.
CONCESSIONS AREA
CONCESSIONS HELD Name
Area (km2)
Wells
Lalla mimouna
2211
1
Sebou
134
1
PORTUGAL SPAIN Tangier
Casablanca
Agadir
TUNISIA Merzouga
ALGERIA
Oran
LIBYA
WESTERN SAHARA
- Cleantech
Zone of interest Concession area
MAURITANIA
MALI NIGER
52 | SHALE GAS INVESTMENT GUIDE | WINTE R 2 015
MOROCCO, POLAND WHO’S WHO
CONTACT INFO
Mahdi Sajjad - CEO Bldg #8 - 1st Floor Corner Ben Barka Ave & Eugenia St. Hay Ryad, Rabat, Morocco tel.: (+44) (0)20 7024 213, email: info@gulfsands.com ANDORA
COMMENT: In February 2015, Gulfsands Petroleum an-
nounced it had performed a successful test flow rate of its DOB-1 shale gas exploration well with a result of over 280,000 cubic meters a day. Gulfsands, which has its headquarters in London, said last year it planned to spend USD 3.5 million (€3.2 million) to develop its acreage in northern Morocco.
CONCESSIONS AREA
CONCESSIONS HELD Name
Area (km2)
Wells
Rharb Centre
-
1
Moulay Bouchta
2850
-
Rharb South
-
-
Fes
-
-
PORTUGAL SPAIN Tangier
Casablanca
TUNISIA Merzouga
Agadir
ALGERIA
Oran
LIBYA
WESTERN SAHARA MAURITANIA Zone of interest Concession area
- Cleantech
MALI NIGER
CONTACT INFO
Jacek Adamiak - Head of E&P Department ul. Kasprzaka 25A, 01-224 Warsaw, tel.: (+48) 22 589 45 55, email:jacek.adamiak@pgnig.pl
COMMENT: PGNiG finished the shale gas horizontal
well Wysin-2H in September and is in preliminary stage of preparation for drilling Wysin-3H shale oil/gas well. Next year, PGNiG will drill another shale gas well.
CONCESSIONS AREA
CONCESSIONS HELD Name
Area (km2)
Wells
Wejherowo
731
8
Kartuzy-Szemud
783
1
Stara Kiszewa
1,178
2
Górowo Iławeckie
1,094
-
Kórnik-Środa
n/a
1
RUSSIA
Gdańsk
LITHUANIA
Olsztyn Szczecin Bydgoszcz
Poznań
BELARUS
WARSZAWA Łódź GERMANY
Wrocław
Lublin
CZECH REPUBLIC
- Cleantech
Rzeszów
Kraków
Katowice Zone of interest Concession area
SLOVAKIA
CONTACT INFO
Wiesław Prugar - President, ul. Prosta 70, 00-838 Warszawa, tel.: +48 22 778 02 00, email: upstream@orlen.pl
BOARD MEMBERS Wiesław Prugar Paweł Martynek
COMMENT: The company focus has turned to conven-
tional exploration, with Orlen acquisitions conventional licenses in Poland from FX Energy and DEA. In 2015 to date, state - controlled Orlen Upstream has drilled one out of four wells planned for the year.
CONCESSIONS AREA
CONCESSIONS HELD Name
Area (km2)
Garwolin
884
1
Lubartów
1,147
3
Wierzbica
652
5
Wołomin
940
1
Wodynie-Łuków
698
2
LITHUANIA
Olsztyn Szczecin Bydgoszcz
Poznań
BELARUS
WARSZAWA Łódź GERMANY
Lublin
Wrocław
CZECH REPUBLIC
Katowice
- Cleantech
RUSSIA
Gdańsk
Wells
Zone of interest Concession area
Kraków
Rzeszów
SLOVAKIA
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| 53
SWEDEN, TURKEY
CONTACT INFO
Stephen Crabtree - CEO, Vasavägen 76, 181 41 Lidingö, Sweden, tel.: (+46) 72 222 6797, email: info@gripenab.com
BOARD MEMBERS
My Simonsson, Torgny Berglund, Peter Schweizer, Stephen CrabtreeSven Erik Zachrisson
COMMENT: The company is looking to develop a high
quality methane gas shallow project where allocated contingent resources were estimated at as much as 1.4 BCM. Although shallow, the target is known as Alum shale, making Gripen’s exploration essentially a shale gas operation. The company aims to start production next year. Gripen has an agreement with AGA Gas to sell and market the gas once the company will produce it.
CONCESSIONS AREA
CONCESSIONS HELD Name
Area (km2)
Wells
Ekeby
188
16
Orlunda
9
1
Naset
3
2
Buttle
614
-
Sandon nr 1
161
-
FINLAND NORWAY Stockholm ESTONIA Goteborg DENMARK
LATVIA
Zone of interest Concession area
- Cleantech
LITHUANIA
Malmo
CONTACT INFO
Shari Lemon - General enequierie Bow Valley Square 1 Suite 1200, 202 - 6th Avenue SW Calgary, Alberta T2P 2R9, Canada tel.: (+1) 403 237 7102, email: slemon@valeuraenergy.com:
COMMENT: The company plans to drill a tight gas well in
Q4/Q1 of 2015/2016 on the Banarli concession with a possible future partner, the search for which is under way with assistance from Moyes & Co law firm. On the concessions where Valuera has a 40% stake, the company with its joint venture partner plan for 2015 is to drill up to seven conventional/tight gas wells. The company has finished 3D seismic on the Benarli concession.
CONCESSIONS AREA
CONCESSIONS HELD Name
Area (km2)
Wells
Copkoy
84
-
ROMANIA RUSSIA
BULGARIA
Banarli
480
-
Istanbul
GEORGIA Ankara
Izmir
GREECE
IRAN
SYRIA
Zone of interest Concession area
- Cleantech
CONTACT INFO
Malone Mitchell 3rd - CEO Sheraton Ankara ve Kongre Merkezi, Boğaz Sokak No:10 G.O.P. Çankaya 06700 Ankara, Turkey tel.:(+1) 214 265 4746, email: investorrelations@tapcor.com
COMMENT: TransAtlantic Petroleum’s exploration strategy for 2015 entails drilling up to seven conventional/tight gas wells. The company is also interested in shale gas, having drilled three wells that originaly targeted oil: Goksu-1, Bahar-1, and Bahar-2H.
CONCESSIONS AREA
CONCESSIONS HELD Name
Area (km2)
Wells
2926
n/a
1
3931
n/a
16
3934
n/a
2
3659
n/a
1
Molla
n/a
3
ROMANIA RUSSIA
BULGARIA
Istanbul
GEORGIA Ankara
GREECE
- Cleantech
54 | SHALE GAS INVESTMENT GUIDE | WINTE R 2 015
Izmir
IRAN
SYRIA
Zone of interest Concession area
UNITED KINGDOM, UKRAINE WHO’S WHO
CONTACT INFO
Stephen Bowler - CEO 7 Down Street, London, W1J 7AJ, United Kingdom tel.: (+44) 20 7993 9899, email: stephen.bowler@igasplc.com
COMMENT: IGas has been offered a total of 6 new li-
cences, covering 7 blocks, in the first group of licences awarded in the UK’s 14th Onshore Oil and Gas Licensing round. Blocks SE41e, SK49, SK89e, SK88b and SK87c have been offered to a joint venture comprising IGas, Total E&P UK and Egdon Resources. Total will have a 50% interest and Egdon a 15% interest.
CONCESSIONS AREA
CONCESSIONS HELD Name
Area (km2)
Wells
PEDL 139
100
-
PEDL 140
141
-
PEDL 107
211
-
PEDL 116
102
-
PEDL 184
386
1
PEDL 190
386
1
Edynburg
Manchester London Zone of interest Concession area
- Cleantech
CONTACT INFO
Gary Haywood - CEO Hawslease, Chapel Lane, Lyndhurst, Hampshire, SO43 7FG tel.: (+44) 1324 476623, email: gary.haywood@ineos.com
COMMENT: INEOS has been offered three new shale gas
licences as part of the UK’s 14th Onshore Oil and Gas Licensing round The licenses cover an area of approximately 250 km2. INEOS will be the sole operator of these licenses.
- Cleantech
CONCESSIONS AREA
CONCESSIONS HELD Name
Area (km2)
Wells
EXL273
48
-
PEDL 145
102
10*
PEDL 193
296
2*
PEDL 133
331
-
PEDL162
400
-
Edynburg
Manchester London
* Wells Drilled by IGas before farm-out agreement with INEOS in March 2015
Zone of interest Concession area
CONTACT INFO
Guido Losi - E&P Project Development Piazzale Mattei, 1 00144 - Rome, Italy tel.:(+39) 06 59 82 1, email:guido.losi@eni.com
COMMENT: The only major energy company left in
Ukraine. Eni has concessions close to Ukraine’s border with Poland in the west of the country, therefore its exploration effort is not directly affected by the conflict in eastern Ukraine. At the moment, the first well has been planned for 2016 and is at a preliminary stage of design documentation and permitting.
- Cleantech
CONCESSIONS AREA
CONCESSIONS HELD Name
Area (km2)
Wells
Baulinska area
466
-
Philimonivska area
493
-
Kurinna area
500
-
Sandugeivska area
498
-
BELARUS RUSSIA
POLAND
Kyiv
Kharkiv
Lviv
POLAND
Yakovlivska area
491
-
Zhuzhelianska area
500
-
Reklynetska area
494
-
Donetsk
MOLDAVIA ROMANIA
Zone of interest Concession area
W W W.CLEANTECHPOLAND.COM
| 55
SERVICE DIRECTORY
Szymon Szcześniak
C O M M E N TA R Y
P I OT R W D O W I Ń S K I H E A D A N A LY S T, C L E A N T E C H P O L A N D
DOLLARPHOTOCLUB
Oilfield service companies in Europe are
currently struggling to find contracts, with depressed oil prices - hovering around $50 per barrel for months - hitting exploration of unconventional oil and gas in Europe. Some demand for services can be still seen in Poland, where the largest oil and gas firm, PGNiG, and Orlen Upstream are continuing to drill, although on a limited scale. In the United Kingdom, the first tranche of the 14th Onshore Licensing Round results has been published and 12 operators have been offered blocks. In 2016, the UK will mainly see service companies shooting seismic surveys, while drilling is not expected to start before Q3 2016. Service companies may also find some demand in Turkey from companies such as the statecontrolled TPAO and a JV made up of Canadian companies TransAtlantic and Valeura Energy, exploring for tight gas. Finally, the most promising place in terms of potential demand for oilfield services is North Africa, more specifically Morocco and Algeria, where unconventional exploration is ongoing. In Morocco, some test wells have achieved gas flows at levels far above those achieved in Europe. Production appears to be only a matter of a relatively short time there. Piotr Wdowiński (+48) 883 307 160 piotr@cleantechpoland.com
COMPLETIONS
3RD PARTY SERVICES
Casing & Cementing Baker Hughes Exalo Halliburton Schlumberger Weatherford UOS Directional Drilling Baker Hughes Drilltech Halliburton Exalo Meehan Drilling Kerui Schlumberger Weatherford UOS Drill Bits, Fluid Systems Baker Hughes Exalo Halliburton MI-SWACO Sirius Pruit UOS Schlumberger Drilling Tools and Services Baker Hughes Bentec Drilltech Exalo JSH Drilling Kerui National Oilwell Varco Pruitt Engineering and Modeling CCS Core Laboratories (Saybol) Geolog ILF Wellynx National Oilwell Varco Hard Banding Arnco Hardbanding Solutions Mud Logging Baker Hughes Drill-Lab Exalo Geolog GEO-data Geokrak Halliburton Schlumberger UOS Weatherford MWD and LWD Baker Hughes Halliburton Schlumberger Weatherford UOS Pipe Supply Iteco JSH Drilling National Oilwell Varco Sumitomo Europe Tenaris US Steel Workstrings Rig Contracting Discovery Drilling Exalo KCA Deutag MND Drilling National Oilwell Varco UOS Waste Management EkoTech Energy MI-SWACO Well Pad Construction CDM Smith NTS Construction
Casing & Cementing Baker Hughes Exalo Halliburton Schlumberger Weatherford UOS Chemicals Brenntag Champion Technologies Clear Solutions Int. Ltd. DOW Dow Corning Dow Microbial MultiChem Sibelco Europe Coil Tubing Baker Hughes Drill-tech Halliburton Exalo Meehan Drilling Schlumberger Weatherford UOS Equipment Supply Baker Corp Balance Point Control Bentec C.A.T. CAT Discovery Drilling Drill-Lab Drilltech GE Oil & Gas ITS (Parker) JSH Drilling Kerui National Oilwell Varco Packers Plus Superior Energy Services Tech Pomp Tenaris UOS Weir Workstrings Pressure Pumping Baker Hughes Halliburton Exalo Schlumberger Tenaris Weatherford UOS Proppant Supply Baltic Ceramics Weir Kaolin AD Sibelco (Unimin) Water Management AECom Baker Corp CDM Smith GE Oil & Gas PP-EKO Veolia Tech-Pomp
Basin Modeling Argo Baker Hughes GEO-Data Geokrak Geomage Kidova Pangea Serafim Construction of Roads CDM Smith NTS Construction Corporate Services PWC Trinity Corporate Services MWH Global Peco Facet Risk To Reputation Data Services Argo ION Emerson Process Management GEO-Data Geokrak Geofizyka Krak贸w Geofizyka Torun Geolog Geomage Geotrace IHS Kidova Pangea Due Dilligence Cleantech Environmental Services AECom CDM Smith GSE Environmental Inwatec PP-EKO Salamander Group URS Veolia Water Facilities Management DBM Services Emerson Process Management Geological Analysis Argo Baker Hughes GEO-Data Geokrak Geomage Kidova LMKR Nutech Pangea Serafim Human Resources HAYS IP Group Land Man CDM Smith IP Group Permitting CDM Smith IP Group Tesla Power generation Aggreko Seismic Services Acoustic Geophysical Applied Seismology Consultants ION Geofizyka Krak贸w Geofizyka Torun IP Group ION UOS Technical Translation Bireta
W W W.CLEANTECHPOLAND.COM
SERVICE DIRECTORY
DRILLING
| 57
EUROPE UNCONVENTIONAL OIL AND GAS COMPANY: SPECIALITY: AREA: ADRESS: CONTACT:
Acoustic Geophysical Services (Viking) Seismic services CEE ul. Chłodna 11 lok. 425, 00-891 Warsaw, Poland tel.: (+48) 667 985 777, email: infohouston@acousticgeo.com
Acoustic Geophysical Services provides acquisition services for land seismic projects. Viking Services B.V. (Viking) announced the completion of its acquisition of Acoustic Ventures, LLC (Acoustic Geophysical Services) in late 2012. In a company statement, AGS said they will to provide seismic acquisition services in eastern and central Europe. COMPANY: SPECIALITY: AREA: ADRESS: CONTACT:
AECOM General services Global MidCity Place 71, High Holborn, London WC1V 6QS, United Kingdom tel.: (+44) (0)20 7645 2000
AECOM is a global provider of technical and management services to in transportation, facilities, environmental, energy and water. AECOM has 45,000 employees in 140 countries and 2013 revenue of $8.2 billion. The Poland office, located Follow AECOM on Twitter at @AECOM. The Poland office was awarded a Chevron contract in 2013.
✭
COMPANY: SPECIALITY: AREA: ADRESS: CONTACT:
Aggreko Power generation, temperature control Global Aggreko Eastern Europe, Soseaua de Centura 7A, Tunari, Ilfov, 077180, Romania, tel.: +40 31 405 22 08, mobile: +40 752 225 985
Aggreko help companies increase profits by creating opportunities, solving problems and reducing risk using our unique network of global locations, equipment and technical services. With over 100 locations in more than 30 countries we offer 24/7 services to companies across a variety of industries. COMPANY: SPECIALITY: AREA: ADRESS: CONTACT:
Applied Seismology Consultants Ltd Seismology, Microseismic UK Claremont Buildings, 5 Claremont Bank, Shrewsbury, Shropshire SY1 1RJ, United Kingdom tel.: (+44) (0)1743 271440
ASC specialises in providing microseismic monitoring of rock masses and concrete structures, particularly applied to Petroleum, Shale Gas, Geothermal Energy, Mining, Radioactive Waste storage, Carbon Dioxide storage, Civil Engineering and Laboratory Testing industries. COMPANY: SPECIALITY: AREA: ADRESS: CONTACT:
Archer Well - Allis Chalmers Integrated Oilfield Services Global Archer, Main Road, Blackburn, Aberdeen AB21 0BP, UK tel.: (+44) 1224 767 500
Archer is a global oilfield service company that specializes in production drilling, unconventionals, well intervention and well integrity. Archer employs 8,300 people. The name “Allis-Chalmers” is the name of the former company, the Allis-Chalmers Manufacturing Company. In February 2011, Allis-Chalmers Energy merged with Seawell to form specialist drilling and well service company Archer. COMPANY: SPECIALITY: AREA: ADRESS: CONTACT:
Argo Geological Consultants Seismic Services Netherlands Bachlaan 46, 3706 BD Zeist, The Netherlands tel.: (+31) 306 959 150, email: info@argo-geoscience.com
Argo Geological Consultants offer geo-scientific services to the oil and gas industry. Formed in 1987, Argo consultants perform the following services: seismic interpretation, geological and geophysical mapping, stratigraphic prediction, reservoir modeling, and E&P team support. Argo Consultants can be seconded to the client office. COMPANY: SPECIALITY: AREA: ADRESS: CONTACT:
Arnco Hardbanding Global Aberdeen, United Kingdom tel.: (+44) 774 028 0302, email: ssmit@arncotech.com
Arnco Technology Trust, Ltd. - Arnco - does hardbanding in a history that dates to 1946 when its founder Roman F. Arnoldy developed and patented a hardfacing alloy. Arnco Technology has products to improve drill string performance and casing wear protection. Consider the product for extreme conditions in deeper, more critical, directional and horizontal extended reach wells. COMPANY: SPECIALITY: AREA: ADRESS: CONTACT:
Baker Corp Liquids and sludge storage US/Canada/Europe ul. Sierpów 33, 95-035 Ozorków tel.: (+48) 604 113 028, email: mkoprowski@bakercorp.com
BakerCorp provides containment, pumping and filtration equipment and services. BakerCorp provides temporary steel storage tanks to the oilfield industry. The company has 100 locations in the U.S.A. and operators internationally in Europe, Canada and Mexico. Markets include chemical, manufacturing, refining, oil and gas, construction, municipal, industrial services, environmental remediation and wastewater. COMPANY: SPECIALITY: AREA: ADRESS: CONTACT:
Balance Point Control Ltd Balanced pressure and wireline services UK, Germany, Netherlands Cumberland House, Endeavour Drive, Arnhall Business Park, Westhill Aberdeenshire AB32 6UF United Kingdom tel.: (+44) 1224 651 077, email: info@bpc.co.uk
Balance Point Control (BPC) provides hydraulic work over, snubbing, well control, engineering, wireline and rental services. Equipment includes Space Saver 385K, 340K Unit, 600K Unit, HWT 600K, Pulling Units, Casing Jack and Wireline Unit. Projects include water production shut off, straddle recovery, safeguarding a blown out well and securing a chemically contaminated well.
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COMPANY: SPECIALITY: AREA: ADRESS: CONTACT:
Balance Point Control Ltd Balanced pressure and wireline services UK, Germany, Netherlands Cumberland House, Endeavour Drive, Arnhall Business Park, Westhill Aberdeenshire AB32 6UF United Kingdom tel.: (+44) 1224 651 077, email: info@bpc.co.uk
Balance Point Control (BPC) provides hydraulic work over, snubbing, well control, engineering, wireline and rental services. Equipment includes Space Saver 385K, 340K Unit, 600K Unit, HWT 600K, Pulling Units, Casing Jack and Wireline Unit. Projects include water production shut off, straddle recovery, safeguarding a blown out well and securing a chemically contaminated well.
COMPANY: SPECIALITY: AREA: ADRESS: CONTACT:
Baltic Ceramics Proppant Poland ul. Reymonta 7, 68-300 Lubsko tel.: (+48) 22 654 66 14, email: office@balticceramics.com
Baltic Ceramics retails proppants and other products used in the extraction of hydrocarbons from unconventional oil and gas formations. Baltic Cerammics is the first proppant distributor on the Polish market, and aims to build a large production facility through both private and public funding sources. COMPANY: SPECIALITY: AREA: ADRESS: CONTACT:
Bentec Rig and drill manufacturer Europe, Middle East Deilmannstraße 1, 48455 Bad Bentheim tel.: (+49) 592 272 80, email: info@bentec.com
Bentec is a manufacturer of drilling rigs and oilfield equipment worldwide based on 125 years of history. A vertical integrated systems provider, their drilling solutions include engineering, design and manufacturing customized drilling rigs, drilling components and electrical control systems. They can provide 24/7 field support and can repair or overhaul rigs globally. COMPANY: SPECIALITY: AREA: ADRESS: CONTACT:
Bireta Translation Poland ul. Bronikowskiego 3/1, 02-981 Warszawa tel.: (+48) 22 648 55 77, email: bireta@bireta.pl
Bireta provides technical translation services up to several thousand pages per month. A project management team guides translators and proofreaders in the construction, process control, electrical, mechanical, natural gas and information technology sectors. Projects include FGD Plants, wind farms, power units, CFB boilers, Combined Cycle Power Plants, CCS plants, NOx denitrification plants, and the LNG Regasification Terminal. COMPANY: SPECIALITY: AREA: ADRESS: CONTACT:
Brenntag Chemical distribution Global Rawdon Park, Green Lane, Yeadon, Leeds LS19 7XX, United Kingdom tel.: (+44) (0)113 3879200
Brenntag is a chemical distributor headquartered in Germany. Brenntag operates a global network in 70 countries employing 13,000 and generating sales of €9.7 billion in 2012. Brenntag links chemical manufacturers to users with 10,000 products and claims to be market leader in Europe. COMPANY: SPECIALITY: AREA: ADRESS: CONTACT:
C.A.T. Oilfield Equipment, Tubing, Proppant Europe Celle, Vorbruch 6, 29227 tel.: (+49) 5141 9895 0, email: info@consulting-agency-trade.com
C.A.T. is a designer, manufacturer and marketer of oilfield equipment. A 20 year history, C.A.T.’s product lines include equipment for well stimulation, well workover and service, including drilling, coiled tubing, nitrogen pumping, cementing, acidizing and sand control equipment. Headquartered in Celle, Germany C.A.T. is vertically integrated: C.A.T. Construction GmbH, TACROM Service S.R.L., and TACROM Drilling S.R.L. among its sister companies. COMPANY: SPECIALITY: AREA: ADRESS: CONTACT:
C.H. Robinson Logistics, Supply Chain Management Global Al. Jana Pawła II 29 Warsaw, Poland tel.: (+48) 22 653 65 30, email: tom.sullivan@chreurope.com
C.H. Robinson is one of the world’s largest third party logistics (3PL) providers offering multimodal transportation services and logistics solutions. In Poland, C.H. Robinson works with shale gas operators and service companies to manage air and ocean freight forwarding, customs brokerage, intra-continental distribution, documentation, and regulatory requirements. COMPANY: SPECIALITY: AREA: ADRESS: CONTACT:
Caterpillar Machine Construction Global 100 North East Adams Street, Peoria, Illinois USA 61629 tel.: (+1) 309 675 1000, www.cat.com
Caterpillar provides equipment and services to the oil and gas industry including gas compression, land and offshore drilling, well servicing, work over rigs, mechanical drives for cranes, fire pumps, fracturing, pressure pumps, generator sets, power modules. Claims to be one of the market leaders in gas compression, drilling, and well servicing products.. COMPANY: SPECIALITY: AREA: ADRESS: CONTACT:
CDM Smith Consulting, engineering, construction, permitting and operations Global Al. Jerozolimskie 123a, 02-017 Warsaw, Poland tel.: (+48) 22 551 93 00, email: warsaw@cdmsmith.com
CDM Smith provides services in water, environment, transportation, energy and facilities. An engineering and construction firm, CDM Smith is employee-owned with its headquarters in Cambridge, Massachusetts in the U.S.A. In Poland, the company provides environmental, construction and project management services to the oilfield and power sectors.
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EUROPE UNCONVENTIONAL OIL AND GAS COMPANY: SPECIALITY: AREA: ADRESS: CONTACT:
Cleantech Poland Commercial due dilligence Europe ul. Krucza 51/31, 00-022, Warsaw, Poland tel.: (+48) 517 469 881, email: info@cleantechpoland.com
Cleantech Poland LLC is a consultancy for oil and gas, helping energy clients grow their business. Cleantech Poland LLC publishes EU EXPLORER, a commercial license rights and contact database, as well as the Shale Gas Investment Guide, a magazine about European unconventional oil and gas. We do commercial research for investors entering the CEE oil and gas markets, and introduce prospective parties to equity investors in their bid to raise equity and source debt. COMPANY: SPECIALITY: AREA: ADRESS: CONTACT:
Clear Solutions International Drilling fluids, Pumps, chemical and minerals for drilling Europe Unit B3, Wem Industrial Estate, Soulton Road, Wem, Shropshire SY4 5SD, United Kingdom tel.: (+44) (0) 1939 235 754, email: info@drilling-products.com
Clear Solutions International Limited is an independent drilling fluid specialist, employing a team of geotechnical specialists and drilling fluids engineers across Europe.. COMPANY: SPECIALITY: AREA: ADRESS: CONTACT:
Core Laboratories Reservoir description and management, production enhancement Global Herengracht 424, 1017 BZ Amsterdam, The Netherlands tel.: (+48) 5586 244 641, email: saybolt.poland@corelab.com
Core Laboratories provides reservoir description, production enhancement, and reservoir management services. Core Laboratories has 70 offices in 50 countries to increase total recovery from existing fields. Core Laboratories helps clients optimize their reservoir performance and maximize hydrocarbon recovery from their production fields, billing themselves as a “reservoir optimization company.” COMPANY: SPECIALITY: AREA: ADRESS: CONTACT:
Discovery Drilling Equipment Drilling Rigs and Equipment Global Hanover Square, 16 Hanover Square, London – W1S 1HT, United Kingdom tel.: (+44) 207 408 9494, email: info@discoveryde.com
Discover Drilling is a private equipment and drilling rig manufacturing company in the oil and gas industry. Headquartered in London, with offices and representations in most major oil regions of the world including US, Canada, Middle East, Northern Africa, Russia and South East Asia. Discovery is a new name in the industry, after the company was formed by private investors on the basis of some rig/component building assets purchased in late 2008. COMPANY: SPECIALITY: AREA: ADRESS: CONTACT:
DNV GL Consulting: Risk Management Global Palace House 3 Cathedral Street SE19DE London, United Kingdom tel.: (+44) (0)20 7357 6080
Stiftelsen Det Norske Veritas (DNV GL) is a classification society organized as a foundation, with the objective of “safeguarding life, property, and the environment”. The organization’s history goes back to 1864, when the foundation was established in Norway to inspect and evaluate the technical condition of Norwegian merchant vessels. DNV describes itself as a provider of services for managing risk. COMPANY: SPECIALITY: AREA: ADRESS: CONTACT:
DOW Microbial Control Plastics and chemicals Global Domaniewska 50A, 02-672 Warsaw, Poland tel.: (+48) 228 540 320
Dow Microbial Control is a provider of biocide and antimicrobial technologies that control & prevent growth of nuisance and dangerous micro-organisms. Products stress process preservation, formulation expertise, dry film fungicides, water treatment chemistry, sanitizing and disinfecting. Their expertise includes regulatory and toxicology, and function as a division of the parent company DOW. COMPANY: SPECIALITY: AREA: ADRESS: CONTACT:
DOW Chemicals, Lubricants, Gelling agents Global Domaniewska 50A, 02-672 Warsaw, Poland tel.: (+48) 228 332 222, www.easterneurope.dow.com
The Dow Chemical Company, Dow, is an American multinational chemical corporation headquartered in Midland, Michigan in the USA. As of 2007, it is the second-largest chemical manufacturer in the world by revenue and as of February 2009, the third-largest chemical company in the world by market capitalization. With a presence in 160 countries, it employs about 54,000 people and spends $1 billion annually on R&D. COMPANY: SPECIALITY: AREA: ADRESS: CONTACT:
Drilltech Drilling equipment rental Global Greenwell Road, East Tullos, Aberdeen, AB12 3AX, United Kingdom tel.: (+44) 122 424 9988, www.drill-tech.pl
Drilltech Group is a specialist drilling rental tool company whose focus is supporting complex drilling such as ERD, deepwater, horizontal and HP/HT. Drilltech supplies drill strings with high torque capabilities and Spiro-Torq, a casing wear protection and torque reduction device. Achilles certified and ISO standards on equipment. COMPANY: SPECIALITY: AREA: ADRESS: CONTACT:
DTZ Real estate services Poland, Global ul. Złota 59, 00-120 Warsaw, Poland tel.: (+48) 22 222 3000, email: info@dtz.pl
DTZ is a property services company, providing occupiers and investors with end-to-end property solutions, global and local market knowledge, forecasting and trend analysis. In the oil and gas markets, DTZ can help suppliers and logistics companies find commercial space for lease, as DTZ has experts who can help real estate assets throughout the CEE.
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COMPANY: SPECIALITY: AREA: ADRESS: CONTACT:
Duon Energy Trading Poland ul. Serdeczna 8, Wysogotowo k. Poznania, 62-081 Przeźmierowo, Poland tel.: (+48) 61 664 18 50, email: ir@duon.pl
DUON Capital Group sells and distributes natural gas and trades in electricity. The origins of the Group activities date back to 2000. Currently DUON is one of the leading private providers of natural gas in Poland. Since 2011, it also has been building its position on the market of electricity trading. COMPANY: SPECIALITY: AREA: ADRESS: CONTACT:
EkoTech Energy Waste management, treatement, effluents Global Aleje Jerozolimskie 96, 00-807, Warsaw, Poland tel.: (+48) 222 755 625, email: info@ekotechenergy.com
EkoTech Energy is a privately company partly owned by Climate Equity Solutions. CES is an investment vehicle established in 2006 for investing in start-up companies. EkoEnergy offers technologies, products, and services aimed at the cleantech, renewable energy and waste management sectors. COMPANY: SPECIALITY: AREA: ADRESS: CONTACT:
Emerson Process Management Production optimisation Global Horsfield Way, Bredbury, Stockport SK6 2SU, UK tel.: (+44) (0) 870 240 1978
Emerson Process Management has an expertise and capabilities in all aspects of automation and information systems related to the production, transmission, and processing of oil and gas products. With industry and automation expertise, Emerson helps clients optimize their oil and gas operations and ensure the most efficient use of capital and resources. COMPANY: SPECIALITY: AREA: ADRESS: CONTACT:
Ensign Drilling, well services, production and manufacturing Global H400 - 5th Avenue SW Calgary, Canada tel.: (+1) 403 262 1361
Ensign Energy Services Inc. is a land-based driller and well service provider for oil, natural gas and geothermal. Since Ensign’s launch in 1987, the Canada-based company has a drilling fleet characterized by proprietary technology such as Automated Drill Rig (ADR). With headquarters in Calgary, Alberta, Ensign’s shares are listed on the Toronto Stock Exchange under the trading symbol ESI. COMPANY: SPECIALITY: AREA: ADRESS: CONTACT:
ERC Equipoise All areas of upstream analysis UK, UAE, Libya 6th Floor Stephenson House, 2 Cherry Orchard Road, Croydon CR0 6BA, London, United Kingdom tel.: (+44) (0) 20 8256 1150, email: info@ercequipoise.com
ERC Equipoise is an independent Reservoir Evaluation company, specialising in all areas of upstream analysis. We offer a variety of services from independent reserve audits, to expert witness testimonials, to technical reservoir consulting including geophysical and geological modeling and reservoir simulation. COMPANY: SPECIALITY: AREA: ADRESS: CONTACT:
EurMidstream Midstream services Europe Chaussée de la Hulpe 120, 1000 Brussels, Belgium tel.: (+32) 266 317 63 anslester@eurmidstream.com
EurMidstream is in the midstream oil and gas business from early stage production to commercial production. Services are offered during the testing and commercialization phases: testing involves CNG trucking and gas powered electricity generation. Commercialization involves design, construction and operation of facilities e.g. pipelines and associated infrastructure. COMPANY: SPECIALITY: AREA: ADRESS: CONTACT:
Exalo Drilling S.A. Integrated oilfield services Africa, Europe, India, Pakistan, Russia Pl. Staszica 9, 64-920 Piła, Poland tel.: (+48) 67 215 13 00, email: marketing@exalo.pl
Exalo, a Polish state owned services company, was formed by the merger of five PGNiG Group companies, Exalo Drilling is the largest service company in terms of the size of its drilling and workover fleet in the Polish onshore drilling market. Exalo works predominantly in Central and Eastern Europe, but has a presence in Asia and Africa, including Kazakhstan.
This is a sample of the full service directory. For full contact data and the primary contact to Europe's entire services market, subscribe to EXPLORER. EXPLORER is Europe’s commercial database for gas exploration & production. Each quarterly, EXPLORER provides you with full commercial point of contact details and competitive intelligence. Sales managers can boost their sales. For information about how EXPLORER can drive growth in your company contact: Parker Snyder, Director, +48 517 469 881, parker@cleantechpoland.com
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The European Shale Gas & Oil Summit 2015 The 3rd European Shale Gas & Oil Summit (E-SGOS) brought oil and gas professionals to Manchester to discuss unconventional gas in the UK and Europe. BY GABOR CHODKOWSKI-GYURICS
THE TOPIC that generated the most buzz across the two days of the conference was the UK 14th Onshore Licensing Round. The full results - according to industry insiders - should be made public by late November. The mood regarding the future of the UK’s shale exploration was cautiously optimistic. Operators discussed social acceptance of shale gas development, a complicated permitting process that has not yet been sped up, and regional differences in the state of gas infrastructure. Cleantech’s whisky tasting at 17:00 p.m. at its exhibition space, was an event where guests could get familiar with the Shale Gas Investment Guide and EXPLORER, a commercial data set. EXPLORER is licensed for limited commercial usage to onshore clients who are looking for a database of the 2000 onshore license blocks operated by some 250 explorers. Cleantech held an operator’s lunch meeting at 13:00 devoted to the UK 14th Onshore Licensing Round. Abdul Sattar, LMKR account manager, and Grzegorz Godlewski, Cleantech’s LMKR GeoGraphix key account man62 | SHALE GAS INVESTMENT GUIDE | WINTE R 2 015
ager, gave a technical overview of GeoGraphix geoscience suite. Cleantech’s executive director, Parker Snyder, moderated day-long discussions on European shale gas development during the second day of the summit. ESGOS, organized by Charles Max-
E-SGOS 2015 was held in Manchester.
well, is complementary to the Terrapinn events organized in Warsaw and London. Both have shown an ability to draw industry and given declining offshore fields a chance for service companies to prove their technology is applicable onshore.
PICTORIAL
The audience included operators and service companies.
Key note speaker from day one addressing audience.
Callum Flynn at left, moderating a discussion panel.
The Cleantech team represented LMKR GeoGraphix.
Round tables helped facilitate discussion.
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A discussion panel about shale gas exploration and development.
Audience members give their rejoinder to the discussion.
Charles Maxwell organizers discuss how to set up the venue.
Manchester cricket grounds, a storied venue.
A guest from Lithuania takes studious notes.
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(221
4th annual
Where the UK’s unconventional pioneers meet
PICTORIAL
18 - 19 May 2016 ILEC Conference Centre, London
The UK’s #1 shale conference & exhibition Tom Pickering
Gunnar Olsen
Colette Cohen
John Dewar
Operations Director INEOS Shale
Director Business Development, Total E&P UK
SVP UK Centrica
Director of Operations Third Energy
Mark Lappin
Ken Cronin
Dan Sadler
Graham Dean
Director of UKNetherlands - E&P Subsurface, Centrica
Chief Executive UKOOG
Head of Energy Futures, Northern Gas Networks
Managing Director Reach Coal Seam Gas
Day 1, Wednesday 18 May 2016
Day 2, Wednesday 19 May 2016
• The Government’s vision for shale gas in securing home grown energy supplies for the UK • How INEOS plan to develop UK shale as a leading upstream player • The role IOCs will play in developing UK shale • Developing skills, creating jobs and making the UK an international centre for excellence for onshore oil and gas • The role of utilities and the opportunities for wider energy industry in developing shale gas • How and why the UK should follow the US example and drive for shale gas and oil during tough market conditions • Discussing the outcomes of the 14th licensing round: merits & challenges of the new acreage • How will independents and energy majors advance onshore exploration in the UK? • Thinking of the long game: shale gas beyond the wellhead • Greener shale gas? Decarbonisation of gas for heating through network innovation
• How are operators preparing permits and planning their operating strategy within the regulatory framework to ensure permits are granted • How can operators work with government and local councils ensure approvals at national and local level? • Management plans, permits and treatment options for effectively managing, treating an disposing of water and fluids • Effective environmental management for the UK onshore industry • Technical considerations for environmental baseline monitoring • New geological exploration targets for shale in the UK and Europe • Assessing the supply chain implications and highlighting any gaps in services, skills and equipment • Where else does unconventional oil and gas hold promise in Europe?
Sponsors and exhibitors include:
To find out how you can be involved in the event contact Josh Dance on josh.dance@terrapinn.com or call +44 (0)207 092 1191
www.terrapinn.com/shaleUK-sgig W W W.CLEANTECHPOLAND.COM
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