May 17

Poland Is Waiting For Shale Gas

By Curve Poland, shale gas in Europe No Comments »

 

The Polish people seem to have adopted a future-oriented perspective on shale gas extraction. They generally believe shale gas to be an important natural resource to both their country and the entire region. According to a recent study conducted by SMG/KRC for PKN ORLEN, Poles are also aware of the possible environmental and economic impacts of shale gas exploration and production. Nearly 70% of all respondents believe that the process of shale gas extraction is safe for the environment, while 97% reckon that its development will lead to the creation of new jobs.

The Ministry of Environment has already issued 113 licences for the exploration and appraisal of shale gas deposits in Poland. Although operators have only been drilling in search of this type of gas for less than two years, the awareness of various shale gas-related issues turns out to be relatively high among Poles.

Extraction of gas from shale formations raises hopes of the entire country, particularly among the inhabitants of regions where shale gas is to be produced. As many as 86% of respondents believe that access to unconventional gas deposits will give Poland independence from external suppliers and, consequently, strengthen the country’s position internationally. According to the SMG/KRC polls, 88% of Poles think that shale gas extraction projects will stimulate the economic growth of regions where they will be carried out. This will be achieved primarily by creating new jobs (97%) and generating additional revenues for local budgets (91%).

A vast majority of Polish citizens believe that shale gas production is safe for the environment, and 78% do not support protests which are being staged to halt gas exploration. 60% of all Poles would not mind having a shale gas exploration project in their immediate surroundings.

While the awareness of opportunities and benefits resulting from shale gas exploration and production seems to be very high, people’s knowledge of the resource itself and the extraction methods is decidedly lower. This issue should be addressed by authorities, educational institutions and operators. A large proportion of Poles (66%), when asked to compare conventional and unconventional gas resources, are unable to name any features characteristic of shale gas, and the majority of respondents (82%) know nothing of hydraulic fracturing (the only viable method of extraction in the case of unconventional gas resources).

Even though 43% of Poles feel that they have already received sufficient information on shale gas exploration and extraction, expectations regarding further education remain high. Relevant information is expected to be provided primarily by local authorities (55%), the government (54%), scientific institutions (54%) and gas exploration companies (48%). Accordingly, the successful exploration and optimal use of recoverable resources will require transfer of knowledge between R&D centres and the exploration and extraction industry.

With a view to meeting these expectations, PKN ORLEN – Poland’s largest conglomerate – is actively involved in various initiatives aimed to develop scientific knowledge and popularise the relatively narrow field of interest related to the appraisal and exploitation of unconventional gas deposits in Poland. An example of such initiatives is the second ShaleScience conference, designed as a platform for sharing information and opinions between Polish and foreign scientists and experts with unique experience in the field. On May 16th 2012, the Copernicus Science Centre in Warsaw will host the second international ShaleScience conference organised by ORLEN Upstream, an ORLEN Group company specialising in the exploration and production of crude oil and natural gas, in cooperation with American partners: Energy and Geoscience Institute – University of Utah and the Schlumberger Innovation Center, SLC, USA.

“Knowledge and innovation are the key to success. Global economic growth would be impossible without a state-of-the-art minerals production sector endowed with advanced technological solutions and able to meet the ever-changing technical, environmental and economic challenges. The unceasing search for improved or novel technologies has enabled us to exploit unconventional resources. The fact that we can take advantage of the extensive – nearly 20 years long – experience of the shale gas industry in the US and Canada guarantees reliability of the cutting-edge technologies we are planning to employ. I am absolutely certain that conferences such as ShaleScience are extremely necessary right now, at the onset of our journey towards commercial exploitation of shale gas. Not only do they provide a platform for expert debate, but also support us in the process of acquiring the much-needed know-how, which will be extremely useful in the years to come,” says Jacek Krawiec, CEO of PKN ORLEN.

This year’s edition of the ShaleScience conference is entitled “Developing the Mental Picture of Reservoir Quality and Completion Quality for Tight Shales” and will be attended by experts in geology, geophysics and petroleum engineering from all around the world, who will be discussing the nature of shale formations and the modern approach to effective extraction technologies which can be applied to gas trapped in such formations. This opportunity to exchange views with experienced international experts will contribute to know-how acquisition and help us design solutions tailored to the specific features of Polish deposits.

Source: 4-Traders

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May 16

Shale Gas in the EU – to Regulate or Not to Regulate?

By Curve energy market, shale gas in Europe No Comments »

 

Shale gas continues its regulatory roller coaster ride in the EU. Earlier this year, a study published by the European Commission concluded that there is already an adequate regulatory framework in Europe for shale gas activity as it currently stands, however the debate rages on.

Across Member States, the approach to further regulation ranges from the UK, where existing environmental regulation is seen as stringent enough to accommodate shale gas, to Germany where there are growing calls for increased regulation. In Poland, new regulation is focused more on the management of shale gas arrangements (for example giving companies which find shale gas priority when applying for a mining permit) and taxation of hydrocarbon production, than on imposing additional controls.

The UK is still arguably the best informed Member State, in that it was the first to carry out a detailed study. This may explain its broadly favourable stance to shale gas. The head of the UK’s Environment Agency, Lord Smith, has just given his support to hydraulic fracturing in the UK. This follows last month’s report issued by DECC (Department of Energy and Climate Change) which recommended that hydraulic fracturing should be allowed to continue, with appropriate safeguards and mitigation measures.

Other Member States are commissioning studies into shale gas which may inform their approach to regulation. In Germany, the results of a comprehensive study by experts into the environmental impact of hydraulic fracturing, commissioned by the Federal Ministry for the Environment and the State ofNorth Rhine-Westphalia, are expected this summer. In the meantime, there are growing calls for increased regulation at Federal level, and an informal moratorium on hydraulic fracturing has just been introduced in the State of Hesse pending publication of the environmental study.

In France, the Government published its expert study into shale gas in March 2012, which was clearly in favour of exploration. At the same time it issued a decree setting up a National Commission to evaluate the environmental issues involved in shale gas. This was the first sign of positive movement in the shale gas debate in France since the ban introduced in July 2011. It remains to be seen however how the election of President Hollande will affect this, bearing in mind his stated opposition to shale gas during his election campaign.

In other Member States, shale gas continues to be controversial. In Bulgaria shale gas exploration through hydraulic fracturing has been banned  following widespread protests (although there are concerns that the decision was made too hastily). A ban in Romania currently looks likely, but only until the results of EU studies into environmental impacts of the technology are known (see further below). There is talk of a similar ban in the Czech Republic, but this is in the context of a concern that its legislation is extremely out-of-date and a ban would allow time to amend all necessary provisions.

At EU level, policy and decision makers continue to monitor the situation to assess whether further regulation is necessary. Two draft reports have just been issued by Committees of the European Parliament on different aspects of shale gas. Both are non-legislative reports, and their purpose is to enable the European Parliament to set out its political position on the issue ahead of any new regulation or policy being proposed by the European Commission.

The draft report by the ITRE Committee (Industry, Energy and Research) on “Industrial, energy and other aspects of shale gas and oil” is broadly favourable. It recognises the crucial role of worldwide shale gas production in ensuring energy security and diversity in the long term, including in Europe and its contribution to achieve the EU’s goal of reducing greenhouse gas emissions by 80-95% by 2050 compared to 1990 levels (the basis of the EU Energy Roadmap for 2050).

The second draft report, on “The Environmental impacts of shale gas and shale oil extraction activities” is by the ENVI (Environment) Committee, whose members are less favourably inclined. Even so, it confirms that the risks are well-understood and can be effectively managed with existing technology and best practices. In particular, it stresses that wellbore integrity is key to preventing groundwater contamination.

Neither draft report calls for new regulation, but the ENVI report takes the stance that further screening is needed of both European and national law to assess their adequacy, with “improvement measures” to be taken where necessary.

Disclosure of chemicals used in fracturing fluid is a key issue for both reports, with the ITRE Committee urging full disclosure, and the ENVI Committee calling for disclosure on a mandatory basis. There is increasing interest within industry in exploring the possibility of adopting a procedure in the EU along the lines of FracFocus in the US. FracFocus is a web-based national registry, run by the US Groundwater Protection Council and US Department of Energy. It allows the public to access information, on a well by well basis, on chemical constituents used in hydraulic fracturing. In some US states, disclosure on FracFocus is a mandatory legislative requirement post application of the relevant fluid.

At the same time, there are many studies ongoing into REACH (the chemicals regulation), and the completeness of registration dossiers on a broad basis, not just in relation to shale gas activity. Whilst there is an understanding at EU level that REACH is not the tool to give the public access to the information it is looking for, correct information must be provided in the registration dossiers when the time comes for registration to ensure that appropriate risk management measures are in place.
Final versions of the European Parliament Committee reports will be published later this year, once they have been voted on in the Parliament. In the meantime other studies have been commissioned by the European Commission into other aspects of shale gas, for example the socio-economic impacts of shale gas and the climate impact of shale gas.

The IEA (International Energy Association) is currently due to issue its “Golden Rules on Unconventional Gas Projects” at the end of this month. These rules will aim to set out best practice and help to “reassure a sceptical public” that shale exploration is safe. Whilst these rules will not have regulatory status as such, they are highly likely to influence how shale gas regulation moves forward at EU and Member State level.

What is welcome is the increasing acknowledgement that decisions around shale gas should be based on fact, not emotion, with consideration of existing studies and commissioning of new studies as necessary to ensure that the debate is properly informed.

Source: Natural Gas Europe

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May 16

Shale Gas Will Create “New Epoch” For Polish Energy, Says PM

By Curve Poland, shale gas in Europe No Comments »

 

Prime Minister Donald Tusk has pledged that the exploitation of shale gas “will begin a new epoch for energy in Poland.”

The premier outlined his thoughts at an academic conference on shale gas in Warsaw on Wednesday.

Nevertheless, Tusk said that there was still much to be done before the project could be effectively realised, and that a legal framework needed to be formalised.

“No one will risk large sums of money in such a place that will not guarantee a continuity of investment,” he said.

Tusk outlined the need for “a tax system concerning this wealth, and a legal system that will be profitable not only for our own country, but also friendly for those who will cooperate with us on this venture.”

The Polish government believes that tapping the country’s shale gas resources will be a major step towards being more independent in the energy sector, with Poland still largely reliant on Russia for gas.

Source: Oil & Gas

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May 14

Poland Debates Natural Gas Future

By Curve energy independence, Poland, shale gas in Europe, Shale gas production No Comments »

 

The fledgling shale natural gas business in Poland is in danger of becoming too politicized, a former Polish geologist said.

Warsaw estimates it has as much as 3.3 trillion cubic feet of natural gas, lower than the 187 trillion cubic feet estimated by the U.S. Energy Information Administration.

Officials, however, said shale gas analysis carried out in conjunction with the U.S. Geological Survey confirmed the country remains in position to become a major energy producer and that more drilling will likely reveal greater reserves.

Polish politicians are divided over what role foreign entities should play in the country’s shale natural gas sector.

“Politicians don’t want to do the wrong thing but they lack experience and this makes it difficult for them to be a partner with a strong industry,” Pawel Poprawa, a shale gas expert formerly with the Polish Geological Institute, told the Platts news service.

State-controlled natural gas company PGNiG holds most of the shale concessions in the country among rival energy players.

One official who spoke with Platts on condition of anonymity said there was an emerging climate of xenophobia in Warsaw. Polish Deputy Environment Minister Piotr Wozniak, however, denied the allegations.

“If we really want to develop these resources we need foreign investors,” he said.

Source: United Press International

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May 14

Fears Grow Over Politicization of Polish Shale Gas Sector

By Curve gas, hydraulic fracturing, natural gas in Europe, Poland, shale gas in Europe No Comments »

 

Some foreign operators and industry experts involved in Poland’s nascent shale natural gas exploration sector are becoming concerned about the politicization of the industry and a tendency to favor domestic state-controlled companies.

Although Poland remains at the forefront of shale gas exploration in Europe there has been a noticeable politicization of the public debate about the industry since last October’s parliamentary elections. During the campaign, politicians appeared to be competing to reassure the public that their party could extract the most from potential shale gas production.

Firstly, the main opposition party, the nationalist and populist Law and Justice, proposed introducing a minimum 40% royalty fee on future production and new legislation outlawing “undesired investors” from acquiring companies engaged in shale gas activities.

The pro-shale gas and economically liberal Civic Platform party, which won re-election, is now drafting legislation to regulate the industry in the light of that debate.

“One political party was saying to the government, ‘you’re giving away everything to foreigners.’ Politicians don’t want to do the wrong thing but they lack experience and this makes it difficult for them to be a partner with a strong industry,” Pawel Poprawa, until recently a shale gas expert at the Polish Geological Institute, said in an interview.

“It would be much better if this were an industry like the coal industry or food industry. There’s too much politics involved and the industry pays the price, Poprawa said.

Before Christmas, the country’s new Treasury Minister, Mikolaj Budzanowski, gave an indication of the government’s thinking when he wrote to the country’s largest state-controlled companies — natural gas company PGNiG; refiners PKN Orlen and Grupa Lotos; utilities PGE and Tauron; and copper miner KGHM –urging them to enter into partnerships for shale gas exploration. Some of those companies are now finalizing the details of a partnership to develop PGNiG’s Wejherowo shale gas license area in Pomerania, in northern Poland.

PGNiG has 15 shale gas concessions in the country’s Ordovician and Silurian shales, the highest number held by a single company. PKN Orlen has six, while the remainder have none.

No Polish company has the resources to fund the intensive exploration campaign shale gas requires. In Poland, each vertical exploration well costs around $10 million and each horizontal well $15 million, up to three times the cost in the US.

In January, it was reported that months of talks about a partnership between PKN and Canada’s Encana, which would see PKN gain access to Encana’s North American acreage in return for investment in its Polish shale gas concessions, were halted because of an alleged decision by Warsaw to prioritize domestic tie-ups.

One official from a non-Polish shale gas operator in Poland said the division into “them and us” was extremely damaging and was driven by politics.

“In the beginning, foreign companies were made to feel extremely welcome — now there’s a lot of talk about foreign companies coming to exploit us,” the official said.

“The issue here is not about money, it’s skill and know-how. Companies like PGNiG have no experience in shale gas and it was madness to stop the tie-up between Encana and PKN. The signal seems to be that Polish companies should start producing shale gas by the next election [scheduled for 2015]. I can understand it as political propaganda and as a signal to the Russians, but it makes no business nor technological sense.”

Mostly foreign operators have drilled 23 exploration wells since 2010 and are contracted to drill 49 new wells this year. None has yet proved economic, but operators are optimistic that it is only a matter of time.

Although exploration costs are high, a huge incentive is the fact that gas prices are up to seven times higher in Poland than in the US.

So far each operator has adopted a step-by-step approach. They drill a vertical well, analyze the data and then decide whether to fracture the well.

If the results are promising, they may drill a horizontal well, So far, just two horizontal wells have been drilled, both by the Isle of Man-registered independent 3Legs Resources.

PGNiG appears to be considering a different approach. There’s talk it is planning to build a wellpad for 12 wells in its Wejhorowo license area.

“This is a political decision motivated by getting production going as quickly as possible. The problem is PGNiG lacks experience, it doesn’t know how to do shale gas. They had people queuing up to go into partnership with them. But a decision has been taken to try to do it with Polish companies. I’m sure they will learn from their failures,” one industry participant said in an interview.

Piotr Wozniak, the country’s Chief Geologist and deputy environment minister, denies any such decision has been made.

“There is scope for everyone. The Treasury Minister will probably try to incentivize the two or three Polish companies that have the strength to invest because this requires a lot of money. There is not enough money to be leveraged by a Polish company. They are too weak. If we really want to develop these resources we need foreign investors. I don’t think it is a decision by the minister to repel investors from PGNiG. Sooner or later we will see partners with PGNiG, Lotos and PKN Orlen,” Wozniak said.

An atmosphere of uncertainty has arisen just as Wozniak and other ministers are about to announce the first details of new regulations for the industry, including a new hydrocarbons tax set to take effect when first production starts in 2015-16.

Currently Poland has no specific fiscal regime for shale gas. The tax rate for conventional oil and gas production is less than 21% and consists of a corporate income tax, an exploitation fee and a property tax.

“The level of government take in Poland is extremely low and everybody, including investors, expects it to rise. In my opinion, the rise should be very, very moderate because we need those investors here. There are not enough companies; we don’t have an oil industry in Poland at all. It’s in our interest to incentivise rather than dis-incentivise,” Wozniak said.

Although the taxation rate is not yet known, the new fiscal regime will likely include a combination of an exploitation fee, CIT, and the new tax, Maciej Grabowski, deputy finance minister, told Platts.

Grabowski said a total government take of around 50% would be fair, without giving details. But that figure has already caused jitters among operators — head offices have been calling Warsaw asking whether such a tax rate is economical for them.

It’s too early to be talking figures, said Kamlesh Parmar, country manager for 3Legs Resources.

“We now need to look at whether or not any of these areas can be made commercial and that involves a lot more work, a lot more drilling, a lot more testing. That costs money in a global environment where money is difficult to come by. What I would really like to see is the authorities making an effort to encourage investment in this industry so that this potential can be made a reality,” Parmar said in an interview.

Source: Platts

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May 14

Shale Gas Could Be Powerful Ally If We Are To Stop The Lights Going Out

By Curve energy market, Ireland, Shale Gas plays in Europe No Comments »

 

Billed as the 21st-century equivalent of North Sea oil, with the potential to turn the Lancashire coast into an unlikely new ­Arabia, shale gas is said to be abundant under the Pennines, Wales, Scotland and Northern Ireland.

It is extracted using a process called fracking, and exploration has focused around Blackpool. In the US, production has caused the price of gas to halve and experts here say it could free Britain from reliance on imported gas for decades.

As we face a looming energy shortage, and ever-escalating household bills, can shale gas really deliver?

Conditional approval for drilling to recommence near Blackpool was given last week after an investigation into two earth tremors linked to fracking last year.

David MacKay, the chief scientific adviser to the Department of Energy and Climate Change, said: “If shale gas is to be part of the UK’s energy mix, we need to have a good understanding of its potential environmental impacts.”

Shale gas is a type of natural gas, which is produced by the breakdown of organic matter and trapped in sedimentary rock formations.

It could add 40 per cent to the world’s recoverable gas resources. Recent exploration successes in the US have driven prospecting across Europe, where Poland in particular has discovered extensive resources. Yet, estimates of Britain’s deposits vary wildly. Cuadrilla Resources, which began drilling near Blackpool in 2010, estimates the Bowland ­Basin site in Lancashire contains as much as 200trillion cubic feet of gas.

Reserves of this magnitude would put Britain among the top 20 shale gas producers, including Brazil, the US, China and Argentina.

However, findings by the British Geological Society suggest our shale gas resources are equivalent to just 18 months of gas consumption.

More recent figures from the US Energy Information Administration say Britain has recoverable shale gas equivalent to five-and-a-half years consumption. ­Natural gas, found under the North Sea in sandstone or chalk, can be tapped just by drilling and allowing it to rise to the surface under its own pressure.

Shale gas has to be blasted out, or fracked, by pumping a mix of water, ground rock, nitrogen and other chemicals down the borehole at high pressure to fracture the bedrock.

Opponents say fracking pollutes groundwater and harms the environment. In one US case, 17 cows died in an hour when fracking fluid was released into a pasture, ­according to New York’s Cornell University.

Critics also believe it poses risks in a heavily built-up area. Last spring those fears appeared genuine when two small earthquakes hit the Blackpool area. Work was halted after the second tremor was linked to fracking, but permission to restart onshore drilling was given last Tuesday.

A six-week consultation period now follows before any final decision is taken on fracking. Philip Mitchell, chairman of the Blackpool and Fylde Green Party, said the Government was taking an “insane gamble”.

He said: “Any decision to include fracking techniques into the UK’s energy policy must only be made on the basis of a thorough understanding of all the risks to the public and the countryside, not just those ­related to earth tremors.”

Despite potential drawbacks, a large, commercially viable shale gas discovery would be fortuitous for the UK, which is facing an energy gap as older power stations come off-line.

By the end of 2015, 11 coal plants will have closed to meet EU carbon constraints and by 2019 seven of our eight nuclear stations will also shut.

More than a fifth of our generating capacity will be gone at a time when the National Grid forecasts a 10 per cent increase in demand. Can shale gas fill this gap?

Tony Cocker, chief executive of Eon UK, said: “If shale gas is safe, it is a good part of the energy mix. There is no silver bullet for energy. A mix gives security and will help with carbon reduction. There is still a place for fossil fuels, for example.”

Eon, which has five million British customers, is investing in a variety of technologies including wind farms, waste-to-energy schemes, gas turbines and cleaner coal-fired plants. Dr Oliver Inderwildi, head of ­Oxford University’s Low-Carbon Energy Centre, at the Smith School of ­Enterprise and the Environment, also believes shale gas is just one piece of the energy puzzle.

He said: “Shale gas is important. It could make us independent of imports for a couple of decades but it is not going to be our energy future. It takes a lot of energy to produce, which makes it costly.

“We still need other sources. If we are to meet ambitious carbon reduction targets, we need nuclear. It is too difficult to scale up renewables in time because of issues such as the land they require.”

For the same reason, Germany is rethinking a decision to ditch ­nuclear power after the earthquake in ­Japan, he says. However, Britain’s plans for new ­nuclear stations are looking shaky after Germany’s Eon and RWE pulled the plug on the scheme.

And yesterday it emerged Centrica, the only British firm in the running to build atomic power plants, had decided to pull out due to ­uncertainty over the Government’s electricity market reforms.

If Britain gets its policy right, we can all enjoy a secure, green and ­affordable electricity supply.

If not, Britain is facing power shortages and huge energy bills. It is a choice ministers must get right.

Source: Express News

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May 08

Polish Experts: Shale Gas Debate Should Be Based On Fact Rather Than Emotion

By Curve energy market, hydraulic fracturing, natural gas in Europe, Poland, San Leon Energy, shale gas No Comments »

 

The Schuman Foundation conference on “Expectations and Reality: What’s next for Shale Gas ?” took place in the European Parliament Information Office in Warsaw on 16 April 2012. The main theme of the discussion was the future of unconventional gas in Poland and Europe following the recently published Polish PGI shale gas reserve estimates and the European Parliament’s Environment, Public Health and Food Safety Committee (ENVI) report on the environmental impacts of shale gas.

Among the experts invited were MEP Boguslaw Sonik  and MEP Boguslaw Liberadzki,  Professor Jan Lubal and Dr. Piotr Kasza of Polish Oil and Gas Institute, and Chemical Substances Inspector Jerzy Majka.

Referring to the ENVI report,  MEP Boguslaw Sonik, report rapporteur, explained that while the document had no direct legislative power, it was very important for the future of shale gas in the European Union. In his opinion, the unconventional gas debate in Europe, which started two years ago, is based largely on myth and fear, hence the need for the European Parliament to adopt an official stance on the issue.

MEP Boguslaw Liberadzki said that in terms of the energy industry’s needs, there were three key requirements to make the environment competitive in the European Union: sustainable economic development, the cost of energy production and, most importantly, agreement among the EU member states. He suggested that shale gas could bring member states together but appealed for the debate on this issue to be less based on emotion and more based on fact. Poland, he continued, should highlight that without shale gas it would be forced to rely on nuclear energy.

Speaking about the potential problems that may arise during shale gas extraction, Professor Jerzy Majka highlighted that accidents cannot be avoided making it necessary for appropriate safety monitoring systems to be put in place. He added that exploration companies should disclose the chemical used in hydraulic fracturing fluids to authorities.

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May 07

And Now, Some Good News In Poland

By Curve hydraulic fracturing, Poland, shale gas in Europe No Comments »

 

It sounded like a dream come true.

In a session entitled dedicated to the Operator’s Perspective at the Unconventional Gas & Oil Summit in Warsaw, Poland Kamlesh Parmar, Country Manager, Poland at Lane Energy recounted how in March ConocoPhillips, the company’s JV partner in Poland’s Baltic basin, had exercised a call option to take a 70% stake in the assets.

“This is exactly what we’ve been working for in the last two years, that at some point they would take over operator control. It’s what I’ve been working for, it’s very positive, and exactly what I was expecting,” recalled Mr. Parmar.

He explained what was attractive to ConocoPhillips.

“As listed company in London we’re obliged to put up reports of what we’re doing,” he said. “We achieved gas flows out of both wells, but does this prove commerciality? Not yet. It’s a new play in a new country with new rocks, so it’s going to take some time.”

According to Mr. Parmar, Lane Energy had fracked wells, got gas to surface and had drilled two horizontal wells in Europe. He said that drilling on the company’s concessions was hard work and now there were new challenges.

“We’re bringing a fairly new concept to Europe,” he explained. “Convincing people was hard work: We had to show them we were serious and this was a real idea.”

Parmar explained that before drilling Lane Energy was trying to raise its profile and raise awareness of shale gas potential, but later tried to calm things down. He joked: “Hang on, we haven’t got the gas yet.”

According to him, having more operators now in Poland was a good thing.

He recalled, “Then we had only PGNiG subsidiaries to provide us with services, and later, international service companies arrived. Since then, more companies are coming to Poland with rigs, and this gives us more choice, and more flexibility to do our work.”

What had it been like partnering with ConocoPhillips?

“We’re two very different companies in terms of size and set up,” he explained. “They have fantastic resources, abilities and a track record in terms of operating shale plays in the US. We came into this with great experience with our team and we’re nimble and we’re quick, so there’s flexibility on our side. We complement each other.

“Having this joint arrangement has enabled us to do our work more quickly. A large company making a fresh entry into a country takes a lot of resource for them, a lot of commitment and a lot of time,” he continued.

“We are the operator, they are our partner – they have rights to look at what we do and we clear everything with them. Now the role will reverse, now they will take over the operatorship. It’s a normal O&G arrangement. It happens all over the world, and is nothing new. It has worked a lot better than I expected as I feared that the our operation style and approach would differ because of the size of the companies.”

He added that the partners had found their way through the size difference.

Parmar recalled the time in Poland when acreage was up for grabs, but that now all the acreage that had any potential at all was thought to be licensed up. Now, he said, it was time for explorers in Poland to work together as an industry; the OPPPW industry group was one manifestation of that.

Of data sharing among concessionaires, he said, “We are all obliged to share data with the Ministry. If you have your acreage, you have it. The issue is how we can share data to move the play forward? This will accelerate the learning curve.”

In terms of service companies, he noted that many players were coming in to Poland.

“I can only dream of a price war,” quipped Parmar. “We’ve come a long way. We’re in an open economy. If we can generate the work, the service companies will come. When we started, they were not here and they are now.”

He mentioned Lane Energy’s efforts to re use water and have the least impact on people in the vicinity of drilling operations.

How was it possible to avoid problems with local communities in Poland? Back up from local authorities?

“Community engagement is absolutely vital,” said Mr. Parmar. “My focus is on government relations and local relations. You have to go there, sit in their office and explain what we’re doing. I do that myself. When explaining drilling or completion activity, it’s important that the Company is there and not just represented by 3rd party consultants.”

He reported that Lane Energy had had very little negative press about its operations in Poland. He suggested letting the local Voivodes take ownership of meetings with communities and organizing meetings through them had helped.

Source: Natural Gas Europe

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May 03

The Financial Times – Finds That Form A Bedrock Of Hope

By Curve energy independence, energy market, hydraulic fracturing, natural gas in Europe, San Leon Energy No Comments »

The Financial Times published a special report on the potential of shale gas to undermine the concept of ‘peak oil’, reshape domestic economies as “one of the linchpins of global energy supply in the 21st century” and recast geopolitics, influencing companies’ investment decisions.

With quantifiable shale reserves now having been identified in Argentina, Australia, South Africa, northern Africa and eastern Europe, as well as in the UK and France, the US Energy Information Administration now estimates these could raise recoverable global gas resources by more than 40 per cent. The author stresses the economic and environmental potential of shale gas as it could improve energy security vis-à-vis Russia, and improve global carbon emissions should China decide to switch from coal. He concludes that the “promise of energy independence, job creation and cheaper power will spur many governments to push ahead.”

Source: EuropeUnconventionalGas.Org

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May 02

UK Study Shows Little Danger Of Shale Gas Water Contamination

By Curve Environment, hydraulic fracturing, natural gas No Comments »

LONDON (Dow Jones)–There is little danger that the technique used to produce shale gas, which is known as hydraulic fracturing, could contaminate ground water provided wells are sufficiently deep, according to a research report published by the U.K.’s Durham University Wednesday.

This conclusion is the second piece of good news in a week for the U.K.’s nascent shale gas industry, which has struggled to overcome public fears about its environmental safety. A report published by the U.K. government’s Department of Energy and Climate Change last week said hydraulic fracturing could safely resume in the U.K., despite having caused earth tremors in the north of England last year.

Hydraulic fracturing, also known as fracking, releases natural gas trapped in shale rocks by forcing a mixture of water, sand and chemicals underground at high pressure. Much of the opposition to the technique, which has spurred a boom in gas production in the U.S., centers around fears that chemicals could move through rock and contaminate ground water.

The research conducted by Durham University, in conjunction with Cardiff University in Wales and the University of Tromso in Norway, studied records from eight different fracking sites in the U.S., Europe and Africa. Of the thousands of fractures studied, “none were found to exceed 600 meters, with the vast majority being much less than 250 meters in vertical extent,” the report said.

This means that, “the likelihood of contamination of drinking water in aquifers due to fractures when there is a separation of more than a kilometer is negligible” because there is no path for fracking water to reach ground water, the report said.

This is already the case for most fracking operations, because for shale gas, “geological conditions are optimal at 2-3 kilometers depth,” said Richard Davies, director of Durham Energy Institute in an interview with Dow Jones Newswires.

On the Bowland shale in Lancashire, where Cuadrilla Resources Ltd. believes it has found a major shale gas resource, fracking occurs more than 1,800 meters below the aquifer, according to a presentation from the company.

In Poland, the other major hope for shale gas in the Europe, BNK Petroleum Inc. (BKX.T) has been drilling rock formations between 3,000 and 4,000 meters below the water table.

There are examples of where fracking at shallower depths has resulted in ground water contamination, notably the Pavillion field in Wyoming in the U.S., Davies said.

For this reason, “we believe that it may be prudent to adopt a minimum vertical separation distance for stimulated fracturing in shale reservoirs,” Davies said. “It should be significantly in excess of 0.6 kilometers.”

In deeper shale formations in the U.S., such as the Marcellus under New York and Pennsylvania, and the Barnett in Texas, “the chance of fractures going into aquifers is incredibly low,” he said.

Source: Wall Street Journal

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