More on the European shale gas rush – The Weald Basin
Interest in Europe’s unconventional gas potential is ramping up very quickly indeed.
Poland has so far been the focus of most European shale gas interest. But security of gas supply is a big concern for many countries in Europe, not least of which is the UK, where energy security more broad has become the subject of numerous alarming reports of late.
Igas for example, which is listed on London’s junior stock exchange AIM, has leased 300,000 acres of shale land in the UK where it plans to begin producing coal bed methane next year.
And it’s not the only UK unconventional play; there at least two companies who are ‘thought to be investigating’ the Lower Jurassic potential of the Weald Basin of Southern England, according to IHS’ Ken Chew. The Cheshire Basin in the country’s north-west is also drawing attention.
One of those is Cuadrilla Resources, a holding company focused on unconventional exploration set up by Australian listed group AJ Lucas, which has several interests in European shale gas. Chew, writing in E&P magazine, says exploration will begin this month:
Cuadrilla Resources, through its Bowland Resources subsidiary, also has interests in the Cheshire Basin in northwest England. Spudding in March 2010, the company’s Preese Hall 1 well will test the Namurian-age Bowland Shale.
However Chew is not especially optimistic: “The Upper Jurassic Kimmeridge Clay has been proposed as a possible target in the Weald Basin, there is considerable doubt that it will be mature for significant gas generation in this basin. If there is to be shale gas potential it seems more likely that it will come from older shales (Rhaetic or older).”
As Nick Grealy points out, Carlyle Group’s energy fund with Riverstone LLC - which Riverstone manages - recently took a stake in Cuadrilla for A$58m.
It’s still too early to know whether Europe will play out similarly to that in the US.
There are several reasons for cynicism: as Jean-Francois Cirelli of GDF-Suez told CERA Week, the relative lack of small wildcatters and of geological data, compared to the US. Moreover Wolfgang Ruttenstorfe of Austria’s OMV told this blog that the depth of shale gas reserves in the Vienna Basin meant wells would be more costly, leaving the economics “an open issue”.
And one of the biggest unknowns is pollution; with questions remaining about the safety of some unconventional gas extraction measures such as horizontal hydro-fracking might not sit well with Europe’s more tightly-packed population.
On the other hand, as Chew points out, Europe has the advantage of a good existing natural gas transit infrastructure. And energy security concerns provide plenty of motivation to expand its options for sourcing the fuel.
Source: Financial Times