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    Cookie-Cutter Approach Won't Work for European Shales

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Summary

North America has been the central focus for shale gas development and now other regions of the world are viewing the resource as a possible future...

by: M_Davies

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Shale Gas

Cookie-Cutter Approach Won't Work for European Shales

North America has been the central focus for shale gas development and now other regions of the world are viewing the resource as a possible future source of supply.

But can shale gas be successfully unlocked in Europe, where companies such as Shell have been active and others including Saponis and San Leon Energy are planning to drill.

Addressing the subject at the American Association of Petroleum Geologists international conference, Stephen Fulgham, President North America Land with oil and gas services giant Schlumberger, said that the short answer is yes, but a cookie-cutter approach will not work.

"Shale plays have opened up all across the Lower 48 as well as Canada and now overseas interest has also been sparked," he said. "One has to ask: Will the same North American techniques work internationally?"

"We must keep in mind again that all shales are not created equal," Fulgham said. "They all have their own personalities and characteristics. "It doesn't matter whether you're talking about the Marcellus, the Eagle Ford, the Barnett or the newest shale to be discovered - they are all unique."

Despite international interest, the lion's share of investment is still going toward North America.

"[But] we firmly believe that natural gas will be a key player in the worldwide energy supply," Fulgham said, adding that in Europe, there will be challenges with the cost of drilling and completing.

"In short, it is not a question of if shale will take off in Europe, but rather a question of when," he said. "[But] as we expand to other areas outside of North America, significant uncertainties exist."

He pointed to technical and commercial issues as other hurdles of going global.

"Flowing the gas from the wellhead to the point of sale and selling the gas might not be as straightforward as it is in North America," Fulgham said. "Constrained infrastructure, the immature regulatory regime [and] different market mechanisms are all factors that need to be taken into account when entering the shale gas train abroad.

"These are factors that will have a significant impact on plays' profitability if they are not addressed properly."

Fulgham said that technology will be even more important in dealing with European shales as the industry will be dealing with geologies that are largely unknown.

"Europe has huge potential for shale gas and oil reservoirs," Fulgham said. "[But] there are big differences between the amount of data available between the North American shale plays and Poland, for example.

"Until just recently there were no modern logs through the Baltic shale."

Schlumberger just logged and evaluated the first well drilled by Lane Energy Poland (3Legs Resources), which ConocoPhillips is a partner in. "Before year-end, Schulmberger will be involved in logging and evaluating several more wells in Poland and throughout Europe," said Fulgham.

Technological and regulatory considerations only play a part in the difference between North America and Europe.

The Chief Executive of Schlumberger Andrew Gould, recently said that drilling and producing of shale gas wells in Europe would also be very different for financial, logistical and social reasons.