As usual the reality below the fold contradicts the headline in this Bloomberg story on Polish shale gas.
Europe’s best hope for a shale-gas boom is fading as explorers in Poland confront rising taxes, a lack of rigs and rocks that are harder to drill than expected.
“The growth of shale in Poland will be slower than in the U.S. because it would need to build the infrastructure the U.S. already had available,” said Laura Loppacher, an oil and gas analyst at Jefferies International Ltd. in London. “We know the gas in place is there, but it’s unclear if it can be extracted at a rate that’s commercial.”
But towards the end:
Not all Polish wells have failed. Last week, ConocoPhillips exercised an option to buy 70 percent of three concessions owned by 3Legs Resources after the Isle of Man-based explorer drilled a successful horizontal well in the Baltic Basin.
“Shale gas in Poland could still be a game changer for the country’s energy sector despite the disappointing shale gas reserve estimate,” said Fitch’s Wicik.
That looks like a vote of confidence to me. This year we’re going to see over 20 wells drilled throughout Poland and expect the situation to become much clearer by the end of the summer. Like anywhere else in Europe, shale gas is not going to be cheap at first. But Russian gas is six times more expensive than US gas and the benefit of energy security is worth even more. Shale will come to Poland despite the cheer-leading of the doomsayers. But as movements in Spain, Turkey and Romania recently suggest, Poland is not the only game in town:
Spain is one of the world’s largest LNG markets: over 35 BCM last year. But shale gas deposits in the Basque Country are being developed and San Leon Energy already active in Poland are headed there too:
Similarly, Turkey used 39 BCM of gas, importing 8BCM in LNG, 16.6 from Russia while being Iran’s only export market for 7.7 BCM. So they have a considerable incentive to look within themselves:
According to analysis released by the U.S. government in early 2011, Turkey has 15 trillion cubic feet of technically recoverable shale gas, reserves that Exxon could help TPAO tap.
“We have carried out our studies … We have big shale gas potential … This attracts a lot of foreign firms, Exxon Mobil in particular,” TPAO Chief Executive Mehmet Uysal told Reuters.
Meanwhile Romania is finally hotting up. Romania was a key oil supplier to Europe at the start of the last century and based on the US analogue of recovering oil and gas from mature regions considered past their sell by date, we can expect great things from them:
Romania is looking to exploit shale gas reserves in a drive for energy self-sufficiency, but critics organising demonstrations on Thursday warn of big risks for the environment.
The US oil group Chevron is one of the firms interested in the opportunity but targeted by protesters who point to controversy in other countries where the so-called “fracking” process of cracking rock at the risk of polluting water has been held up.
“Shale gas definitely represents the future and Romania must determine if such deposits do exist on its territory,” Alexandru Patruti, the head of the national agency for mineral resources (NAMR), told AFP.
NAMR is in the early stages of a survey to assess reserves but a study in the United States has estimated joint reserves in Romania, Bulgaria and Hungary at about 538 billion cubic metres.
This puts the reserves among the biggest in eastern Europe and big enough to give Romanian officials ambitions of freeing the country from costly imports from Russian giant Gazprom.
Closer to home, more later this week on the UK potential for shale gas. And oil.