Back in July, in an email exchange with Foolish oil patch
pro
carbonates, I threw out the following idea: "If I were in
exploration, I feel like I'd be looking for shale plays over
in Europe. Given the urgency to wean off Russian gas, it
seems like the wind would really be at one's back."
My correspondent heartily agreed, saying that it's "just a
matter of time before gas shales become common plays in every
part of the world."
We've documented
Royal Dutch Shell 's (NYSE: RDS-A)
move on the Montney,
BG Group 's
hitch-up to the Haynesville, and of course
BP 's (NYSE: BP) and
StatoilHydro 's (NYSE: STO) joint ventures
with
Chesapeake Energy (NYSE: CHK) in
twoof the big U.S. shale
plays. As the international exploration alliance between
the latter two makes quite clear, the Europeans are seeking
knowledge that they can transfer to plays in Europe and
elsewhere around the world. They're not alone, as we'll
see.
From academia to government, and from small
independent-exploration shops to the world's oil-and-gas
supermajors, this idea of shale gas as a global game-changer
really seems to be gaining traction.
The Germans head to Houston
Rice University's Baker Institute recently hosted
Christian Wulff, prime minister of the state of Lower Saxony
in Germany, who delivered a speech on the importance of
unconventional resources and renewable energy for a cleaner
future. But his Excellency didn't travel all the way to Texas
just to deliver a feel-good presentation. Like Texas, Lower
Saxony is a major domestic supplier of both natural gas and
wind energy. An executive from Horizon Wind Energy was on
hand to discuss ways to structure policy to spur growth at
the lowest cost, and event sponsor
ExxonMobil (NYSE: XOM) had its president of
exploration on hand to discuss the global significance of
unconventional gas.
After meeting with ExxonMobil representatives, Wulff
announced that the company will spend at least 100 million
euros on unconventional gas drilling in Lower Saxony before
next summer. The company began drilling there last year, and
it seems very keen on this basin, across which Exxon acquired
1.3 million acres of leasehold in 2007. That's almost as big
as Chesapeake's position in the massive Marcellus shale.
Conoco turns its eyes east
In August,
ConocoPhillips (NYSE: COP) announced that
it's farmed into a million-acre license area held by a small
private operator in Poland's Baltic Basin. The partners began
seismic shooting in July and expect to begin drilling in the
first quarter of 2010. A concession map reveals that adjacent
or nearby acreage holders include
BNK Petroleum and CalEnergy, a subsidiary of
MidAmerican Energy. Yes, even if you're
tired of him, it appears that Mr. Buffett's in on the
shale race, too.
Following Conoco's Poland deal, Exxon confirmed that it
has also grabbed acreage in the country. The rock looks good,
royalty rates are low, infrastructure is in place, and
gas-hungry Western Europe is right nearby. As Conoco's
exploration chief put it, "What's not to like about this type
of play?"
Conoco has cast its shale sights even further east lately,
in announcing a cooperation agreement with
PetroChina (NYSE: PTR) parent CNPC to develop
the gas resource in Sichuan province. The company thus joins
the Statoil/Chesapeake joint venture and others potentially
seeking their shale fortune in the Middle Kingdom. Continued... |