Jan 26

Polish Gas Giant Makes Shale Deals

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State-owned oil and gas company PGNIG will work with other state-owned energy producers PGE, Tauron and copper miner KGHM in shale gas exploration in Poland.

The company said it had signed three letters of intent to cooperate with the three domestic heavyweights.

The government said recently it wants state-owned companies to make a ‘strong’ contribution to developing domestic shale gas.

Shale gas could start production in 2014, according to the government.

Poland has the largest deposits in Europe estimated at 5.3 trillion cubic metres and enough to meet domestic gas needs for up to 200 years, according to some projections.

At present Poland relies for its energy supplies mainly from Russia and environmentally unfriendly but domestically mined coal.

The government is becoming increasingly interested in maximimising domestic benefits from shale gas production, hence PGNiG’s and the country’s main oil refiner PKN Orlen’s plans to ramp up cooperation with local players.

The move is important in that it indicates a shift towards greater interlinkage of domestic resources, and possibly away from a reliance on foreign majors.

PGNiG holds 15 such of about 100 shale gas exploration licenses, with global majors such as Chevron and Exxon Mobil also eager to get in on the act.

The three agreements are for exploration in the Wejherowo acreage in northern Poland.

Wejherowo is one of 15 concessions held by PGNiG and believed to be one of the largest, although exact figures have not been released, if they are known at all at this stage.

The three domestic power producers will reportedly be responsible for infrastructure works above ground.

The total investment will be somewhere between 400 million and 500 million zlotys, PGNiG said.

Tauron said it plans to build a gas-fired power plant and plans to work with PGNiG on a 600 megawatt plant at Stalowa Wola. It also plans to build an 800 megawatt plant with KGHM, both fired by shale gas.

Source: theNews.PL

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Jan 26

Shale Gas Saves US $100 Billion

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The San Francisco Chronicle explains to readers why shale gas production is keeping their gas bills lower this winter:

Natural gas prices that slumped to a 10-year low this month could save U.S. consumers $16.5 billion on home energy bills over the course of a year, according to a senior economist at the U.S. Federal Reserve.

U.S. households might see total savings from lower gas prices of as much as $113 billion a year through 2015, including tack-on effects such as lower product prices and higher wages generated by cheaper fuel, according to energy industry consultants IHS Inc.

The projected savings is “an unbelievable amount of money,” said Greg Ebel, chief executive of Spectra Energy Corp., during a Jan. 17 interview. “That’s better than any tax cut you’ve seen out there, better than any government handout.”

If consumers end up pocketing more than $100 billion due to low gas prices, it could add a “significant” piece to U.S. gross domestic product growth for 2012 or 2013, said Robert Solow, professor emeritus at the Massachusetts Institute of Technology in Cambridge, who won the 1987 Nobel Prize in economics. “If that figure is right, it’s a substantial amount,” Solow said in a telephone interview yesterday.

The savings realized by the nation’s 113 million households will vary depending on location and how much gas makes up the home’s total energy bill. Gas utilities are passing along the lower prices they’re paying for the fuel because of a glut of new domestic production from hydraulic fracturing and horizontal drilling in shale formations.

The price of gas has plunged about 30 percent since the end of October on mild weather and oversupplies, according to data compiled by Bloomberg. Natural gas for next-month delivery fell to $2.322 per million British thermal units on Jan. 19, the lowest price since February 2002. Gas settled at $2.728 yesterday.

Consumers will likely spend about 95 percent of the direct savings they see from their gas bills, said Bernard Weinstein, associate director of the Maguire Energy Institute at Southern Methodist University in Dallas. While that amount is a fraction of the $10.245 trillion in consumer spending for 2010, “it’s a step in the right direction,” Solow said.

Electricity prices, historically tied to the gas market, also are falling, although not necessarily for consumers. That’s because many power companies have raised rates to upgrade an aging power grid, install pollution controls and build new generators.

The typical U.S. household gas bill this year would drop to $323.50 from $468.80 in the previous year at an average gas price of $2.50 per million British thermal units — a savings of $145.30, said Mine Yucel, vice president and senior economist at the Federal Reserve Bank of Dallas.

Residents are forecast to pay about 25 percent less this winter for gas used in stoves, furnaces and fireplaces than they did in 2008, when the fuel last touched highs of more than $13.50, according to the U.S. Energy Information Administration.

“I think of shale gas as a real game-changer for consumers of natural gas,” said Hank Linginfelter, executive vice president of Atlanta-based AGL Resources Inc., in a telephone interview. “It’s having a significant impact on prices.’

AGL Resources, the largest standalone local U.S. gas distribution owner, said December bills have fallen on average 25 percent from a year ago at its utilities in seven states.

Iowa gas bills fell about 19 percent in December compared to the same month a year ago on lower demand and prices, MidAmerican Energy Co., owned by Warren Buffett’s Berkshire Hathaway Inc., said. Piedmont Natural Gas Co., based in Charlotte, North Carolina, has proposed cutting rates next month that would bring the average bill down by 40 percent since 2008.

Source: San Francisco Chronicle

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Jan 25

San Leon Energy Plc Announces Completion of Morocco 2D Seismic Campaign

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Wednesday, January 25th, 2012

San Leon Energy Plc (AIM:SLE) (“San Leon” or the “Company”) is pleased to announce that it has completed the acquisition of more than 2,280 km of 2D seismic across its Tarfaya and Zag Licenses onshore Morocco. The data was acquired by San Leon Energy’s wholly owned subsidiary, NovaSeis.

608 line km of high density 2D seismic data was acquired on the northern portion of the San Leon operated Tarfaya License across the J North prospect. This adds to the existing 2,289 line km of existing 2D seismic across the license. The Netherland, Sewell & Associates 2008 CPR placed 156 million barrels of recoverable prospective oil resources in the J North prospect with upside potential of more than half a billion barrels. In total San Leon currently has 12 leads and prospects across the Tarfaya license with net prospective resources of 711 million barrels of oil equivalent based on the Netherland, Sewell & Associates 2008 CPR. Several new adjacent leads have also been identified around J North as a result of the new 2D seismic data.

The new seismic data quality is significantly improved compared to previous 2D seismic data in the area as a result of longer offsets and higher density acquisition. The new data is currently being processed and interpreted by the Company in its Warsaw office.

1,674 km of 2D seismic data was acquired across the San Leon operated Zag License in Morocco (greater than 5 million acres). This is the first seismic data ever acquired across the Zag License. The combined Zag Basin aeromagnetic survey acquired in 2009 by San Leon and the adjacent license to the north was the basis for the layout of the 2D program. The Company is focusing on the Zag license for both conventional and unconventional oil and gas potential. The unconventional gas potential is primarily within the Silurian interval, whilst the conventional oil and gas potential is in the Ordovician and Devonian intervals.

The Company will continue integrating the new seismic results into its existing basin model in preparation for opening a data room to seek partners for the exploration drilling phase. Any future exploration activities in the Southern provinces will, as they have been to date, be in accordance with international law.

NovaSeis (“the Crew”) was established by San Leon to acquire its onshore seismic data at lower cost with the flexibility to optimise acquisition parameters in difficult data areas. The Crew currently has 1,200 channels of Geospace Technologies (subsidiary of OYO Geospace) cableless GSRs with five Sercel NOMAD vibrators. The Company plans continued investment into NovaSeis to expand its capabilities to 3D acquisition this year as part of upcoming seismic acquisition programs in Poland. While NovaSeis was created to serve the needs of the San Leon Energy group, it is also available to acquire revenue-generating projects outside the Company.

Oisin Fanning, Chairman of San Leon, commented:

“We view Morocco as a long term project for the Company with significant upside over a huge unexplored area. The excitement of the potential of Morocco is based upon the significant production in the same basin in Algeria as well as the huge potential for a Silurian shale gas play. The completion of our seismic program is the next step in bringing our projects closer to drilling.

I am also very pleased with our investment in NovaSeis which has helped us acquire high quality, low cost seismic and given us the flexibility to acquire more data per line km than we could have using a more conventional cable acquisition system. The next step for NovaSeis is to return to Poland where the wireless system will make a real impact by significantly reducing the surface impacts of seismic acquisition while giving us the flexibility to acquire data in areas that a traditional system would not be possible.”

Source: San Leon Energy

 

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Jan 24

Obama Backs Shale Gas in State of Union Address

By Curve natural gas in the USA, shale gas No Comments »

 

President Barack Obama on Tuesday pledged support for the U.S. shale gas boom, but said government must focus on safe development of the energy resource.

In his State of the Union address, Obama called for government to develop a roadmap for responsible shale gas production and said his administration would move forward with “common-sense” new rules to make sure drillers protect the public.

“America will develop this resource without putting the health and safety of our citizens at risk,” Obama said.

Obama’s proposals on natural gas were similar to previous administration comments, and would do little to satisfy oil and gas industry backers who argue that the federal government needs to stay out of the way of burgeoning shale development.

Some industry groups had hoped Obama might streamline government oversight or offer specific plans to increase access for oil and gas drilling.

Instead, Obama pressed again for ending tax breaks for the oil and gas industry in his speech, something he has pushed for repeatedly without success.

The American Petroleum Institute, the top oil and gas lobbying group, said the policies Obama promoted in his speech are at odds with expanding energy output.

“It’s a contradiction because he calls for further regulation that will slow down the production of energy and then increasing costs by raising taxes,” said the institute’s president, Jack Gerard.

Chris Jarvis, president of Caprock Risk Management in Rye, New Hampshire, said Obama avoided tackling key issues regarding natural gas, such as switching to using more gas in transportation.

“He was basically using his discussion on energy to deflect away from his critics versus really doing major changes with the U.S. energy sector and natural gas,” Jarvis said.

Improvements in drilling techniques have transformed the U.S. energy landscape in recent years by unlocking the country’s immense shale oil and gas reserves.

But the drilling boom has raised concerns about the safety of natural gas extraction techniques like hydraulic fracturing, or fracking, which environmentalists say could pollute water supplies.

Still, with fracking mostly exempt from federal oversight and most shale gas production occurring on private lands, the Obama administration is limited in its authority over the practice.

Obama said the administration would move forward with rules that would require companies to disclose chemicals used during the fracking process on public lands.

In wide-ranging comments about the energy industry, Obama also said he would direct his administration to open 75 percent of the country’s potential offshore oil and gas resources to drilling.

This proposal would be carried out in the latest offshore drilling plan released by the Interior Department in November.

Obama strongly defended his record in investing in renewable energy.

The high profile collapse of solar-panel maker Solyndra last year – after the company received $535 million in loan aid from the administration – led critics to argue that government should not be in the business of backing energy companies.

“Some technologies don’t pan out; some companies fail,” Obama said. “But I will not walk away from the promise of clean energy … I will not cede the wind or solar or battery industry to China or Germany because we refuse to make the same commitment here.”

Though Congress failed to move on a proposal he put forward last year to set a target for power plants to produce mostly clean electricity by 2035, Obama said the administration would establish zones to develop 10 gigawatts of solar and wind power projects on public lands.

In addition, the Defence Department will purchase one gigawatt of renewable energy, with the Navy purchasing enough capacity to power a quarter of a million homes a year.

Source: Reuters

 

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Jan 24

Is Lithuania the New Poland?

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Reuters reports on how a Polish oil company is branching out:

Polish oil company Lotos said on Monday it will start drilling for shale gas in neighbouring Lithuania, and plans to take part in a tender to obtain new licenses later this year.

“We decided to start with the first drilling for shale gas or shale oil, let’s see what is underground,” Pawel Olechnowicz, the president and chief executive of Lotos, told reporters.

“We will make the first tests this year,” he added, declining to specify the timing.

Lotos CEO also said the company obtained approval to drill new wells for conventional oil in Lithuania, speaking after meeting with the Prime Minister Andrius Kubilius.

The Polish government holds a 53 percent stake in Lotos, which controls the biggest Lithuanian oil company Lotos Geonafta, and has 50 percent at another oil company, Minijos Nafta.

“Minijos Nafta will be the first company in Lithuania to explore the shale in Lithuania. We have been working on this for two years already,” Thomas Haselton, the CEO of Minijos Nafta, told Reuters in an email.

“Our specific exploration plans with regard to shale this year are to frac one of our existing wells within the shale zones, probably in the spring, and to drill a new well specifically for shale hydrocarbons in the summer or fall of this year,” he added.

A separate license to explore shale for hydrocarbons is not required in Lithuania, the government officials said, but there could be environmental requirements to be met.

“It is too early to say whether Lithuania will produce and oil or gas from shale, but there is a reasonable chance that hydrocarbons could be produced from shale in the southwestern part of Lithuania,” Haselton said.

Lithuania’s State Geological Service plans to call a tender in spring to issue new licenses to explore for hydrocarbons, including shale gas, at two new fields close at the border with Poland and with Russia’s enclave of Kaliningrad.

The fields cover about 2,000 square km, while already issued licenses cover a territory of about 6,300 square km.

“We are also prepared if there is going to be issued an new run for new concession here in Lithuania… Lotos Geonafta is going to be a partner of that,” Olechnowicz told reporters.

Preliminary estimates show there may be up to 120 billion cubic metres of shale gas reserves in Lithuania, government document has showed.

Neighbouring Poland has issued more than 100 shale gas exploration permits to companies including global majors Chevron and Exxon Mobil, after a U.S. study said Poland could have 5.3 trillion cubic metres of recoverable shale gas, the biggest in Europe.

Source: Reuters

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Jan 20

San Leon Energy Announces Tarfaya Oil Shale Update – Hydraulic Connectivity Established

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San Leon Energy PLC

Tarfaya Oil Shale Update

RNS Number : 4968V
San Leon Energy PLC
13 January 2012

San Leon Energy Plc

(“San Leon” or the “Company”)

Tarfaya Oil Shale Update – Hydraulic Connectivity Established

San Leon is pleased to announce that is has established connectivity between its two test wells in its Tarfaya Oil Shale project.  Injection water has been observed in three wells, including pilot Well A and Well B drilled by the Company as part of the pilot project, and the pre-existing Star 12 core hole.  Several transmissivity and static formation pressure tests were performed to identify the origin of the water which have confirmed connectivity between the two pilot test wells which are ~10 meters apart.  Operations have been temporarily suspended pending continued technical analysis and forward operational planning.

Based on the test results, the Company has reached the following conclusions:

Well A, Well B and Star 12 are hydraulically connected through a permeable zone from 191.00 to 197.62 meters below ground level (mbGL);

Star 12 provided, over a long period, a flow path from the upper aquifer, feeding the permeable zone below 184.80 mbGL;

After cementation of the Star 12 well, the formation from 191.00 – 197.62 mbGL acted as a closed system with depletion related to formation water production (via airlifts);

The water samples suggest that the water from the deep permeable zone is similar to the shallow aquifer.  The water contains primarily sodium chloride (78-91% of dissolved solids by weight), with small amounts of magnesium, calcium, potassium, sulfate and nitrate.

Despite establishing hydaulic connection between the two pilot wells, the Company has decided not to risk contaminating the shallow water aquifer.  Further analysis will be performed prior to resuming operations either at the same location or at an alternative site.

Based on the recent results the Company will now identify an alternative drilling site away from existing wells to test the extent of the play and the associated water acquifers.Future wells will be cored and completed based upon the new information gained during this phase of the pilot project. In parallel, a hydrodynamic study of the basin is being contemplated to understand the regional aquifer systems in relation to the potential oil shale pay zones.

A permanent presence has been maintained at the site to ensure the security of the equipment and facilities installed to date.

The Company has been contacted by several companies with oil shale experience regarding partnering with San Leon on the Tarfaya Oil Shale project.  A data-room is now open that includes geotechnical information as well as engineering designs for the pilot plant.  The Company is in active discussions with interested parties.

Oisin Fanning, Chairman of San Leon, commented:

“We are delighted to have confirmed natural connectivity between the wells. However, we have decided that San Leon should not be taking any environmental risk whilst we aim to continue to prove up the in situ extraction concept of the Tarfaya oil shale resources and to rapidly progress toward operations of the processing pilot plant designed and built for the project. Several firms have expressed a desire to partner with us in the project, confirming our belief  that the Tarfaya oil shale resource development represents a significant opportunity as an unconventional play.”

Source: San Leon Energy

 

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Jan 20

Poland Seeks Shale Drilling Boost for 2015 Start

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Polish companies with permits to explore for shale gas in the country must intensify drilling to start production of the fuel by 2014 or 2015, Treasury Minister Mikolaj Budzanowski told reporters today.

Polish companies should each drill 12 wells and perform 12 hydraulic fracking operations a year, Budzanowski said.

Poland’s shale gas may be as much as 50 percent cheaper than the Russian gas Poland now receives from the Yamal pipeline, paying more than $500 per 1,000 cubic metres, he said.

Polish utilities should also invest in shale gas exploration as they will be ‘major consumers’ of the fuel that will power new electricity generation units, Budzanowski said.

Source: Bloomberg Business Week

 

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Jan 20

Poland Shale Gas Undaunted by Bulgarian No

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The ban on the exploration and production of shale gas in Bulgaria has in no way affected the resolution of the Polish government to pursue the approach in Poland.

This was revealed by the Polish Ministry of Foreign Affairs to the Polish National Radio Thursday, a day after the Bulgarian Parliament voted to ban the hydraulic fracturing technique involved in exploring and producing shale gas.

Hydraulic fracturing – or fracking – is widely claimed to be environmentally hazardous, as it involves pumping undisclosed chemicals at exceedingly high pressures deep into the ground. Cases have been documented in which this has severely poisoned ground water.

In June, the Bulgarian government granted US gas giant Chevron a permit to explore for shale gas in a large segment of north-eastern Bulgaria, traditionally one of the country’s most productive agricultural regions.

This has led to a number of protests that culminated when last Saturday thousands came out in Bulgarian capital Sofia, Varna and Dobrich in the north-east, as well as a number of other cities.

Wednesday Bulgarian MPs voted with a large majority to ban for an indefinite time exploration and production of shale gas with hydraulic fracturing, imposing a BGN 100 M penalty for infringement.

“This will not change Poland’s existing position presented to the EU, in which every member state has the sovereign right to define its own position regarding energy resources,” the Polish Foreign Ministry said in a statement Thursday.

Some in Poland feared the country, among the first in Europe to have started exploring for shale gas, might get isolated when Bulgaria became second to ban hydraulic fracturing, following France who did so in 2011.

In Poland, as in Bulgaria, shale gas and oil are advertised as alternatives to imports of Russian energy.

A new Polish geological report says there are indications of large shale oil deposits near Warsaw, Radom (south of Warsaw) and Elblag near the Baltic coast, writes the BBC.

Source: novinite.com

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Jan 20

Total Appeals French Shale Ban

By Curve shale gas in Europe No Comments »

 

Oil giant Total has lodged an appeal against the withdrawal of its permit to drill exploratory wells for shale gas in the south of France.

The government withdrew drilling permissions in October after widescale summer protests about the environmental impact of the only known technique for exploiting shale gas, hydraulic fracturing.

Total Gas Shale Europe managing director Bruno Courme said at a press conference in Paris that Total “respects the law” however, he added, “our position is that the law does not justify the withdrawal of our permits”.

He was speaking after a meeting of oil company heads and Ecology Minister Nathalie Kosciusko-Morizet on shale gas entitled “The French ban: how to get out?”.

UMP MP François-Michel Gonnot sparked fears among environmentalists that the government was preparing to overturn the ban as he said: “I do not see why the debate cannot continue just because we voted a law based on circumstance. It’s not a taboo subject.”

Hundreds of thousands of people had campaigned against shale gas exploration and the use of hydraulic fracturing last summer and the government introduced an outright ban despite permits already having been issued. Oil firms were told to submit new applications that did not propose the use of now-banned technique.

Total’s application to drill the Montélimar prospect (which covers 4,327sq.km from Montélimar to Montpellier) said specifically that it would not use hydraulic fracturing but the government criticised it for not being “sufficiently explicit” in explaining alternative techniques.

Hydraulic fracturing is a technique where shale gas tightly bonded in deep rock structures is freed using underground explosions to fracture the rock.

Known as “fracking”, the technique has been criticised as millions of litres of chemical-laden water is used to force the gas up to the surface and there are fears this will contaminate aquifers and other underground water sources.

Environmental protesters also fear the impact of widescale drilling rigs and access roads being set up across the Ardèche, Drôme and Gard departments.

Shale gas has not yet been confirmed in the French sites but protesters say that if Total’s exploratory wells do strike gaz de schiste there will be immense pressure on the government to authorise “fracking” no matter the feared consequences.

Source: The Connextion

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Jan 17

San Leon Reveals Prospects in Albania

By Curve natural gas in Europe No Comments »

 

An important announcement from San Leon Energy this week; details on the Durresi licence in Albania. Here’s the full press release:

San Leon Energy is pleased to announce significant progress on its 100% owned Durresi License (4,208 km2) in Albania. The Company has received the first final processed volumes from its 840 km2 3D seismic survey in late 2011. The survey was processed by Western Geophysical in London with a focus on detailed structural imaging incorporating relative amplitude preservation for the detection of subtle stratigraphic prospects on the flanks of the complex structural setting offshore Albania.

Continued processing of the new 3D and existing 2D and 3D seismic for the detection of stratigraphic traps is being performed in the Company’s Warsaw office in conjunction with continued detailed subsurface analysis. Initial modeling of the seismic response from existing well data has proven the potential for using seismic amplitude analysis for the direct detection of hydrocarbons. This means significantly reduced exploration risk for prospects.

The Company’s Albania subsurface team, located in its Warsaw office, continue to interpret the extensive 2D seismic database (>5,000 line km) over the license and is now integrating the new 3D seismic interpretation. Initial results of the new interpretation has identified several new large oil and gas prospects across the many petroleum systems that exists across the Durresi License.

To date the Company has identified numerous prospects and leads across the license with unrisked prospective recoverable resources of more than 1 billion barrels of oil equivalent across the proven petroleum systems. Six source rock intervals have been identified with several potential oil reservoirs expected in Mesozoic carbonates and flysch as well as numerous gas reservoirs in the shallower Tertiary clastic deposits. The San Leon subsurface team continues to identify prospects across the license.

The Company has recently signed Confidentiality Agreements with several large E&P companies regarding farming into the license; and continues to receive unsolicited interest from other large E&P companies. As a result of which San Leon have opened the data room early to select companies and have already recently been visited by several companies. Plans to drill the first of a two well exploration program on the block are being made for late 2012/2013.

Oisin Fanning, Chairman of San Leon, commented:

“We continue to make rapid progress on our Albania project. After being awarded the Durresi License in February 2011 we quickly shot our 3D program and, less than a year later, are identifying numerous high quality oil and gas prospects across the license. The new 3D has revealed several large structural oil and gas prospects and is showing the significant stratigraphic potential that exists across the license. The possibility of using seismic amplitudes to significantly reduce exploration risk further demonstrates the high potential of offshore Albania.

We are very excited by the potential of the Durresi License and the interest that we are receiving from industry leading E&P companies to gain access to this high potential area.

Albania is quickly becoming a core focus area for San Leon given the huge upside potential, lower risk exploration and the level of interest that we have received from leading E&P companies.”

Source: San Leon Energy

 

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