The European shale gas revolution is still in its infancy and though its commercial potential could rival that of North America, significant challenges lie ahead. France has put a moratorium on shale gas activity while a comprehensive study into its environmental impact is being carried out, and its National Assembly has voted in favor of a ban on hydraulic fracturing.
The potential for shale gas production in Europe is undoubted, as consultancy IHS CERA estimates that Europe’s total shale gas in place could be 6,115 Tcf. Among the key challenges that will determine the ultimate productivity in Europe is a regulatory environment that is currently ill-suited to unconventional gas, the company said. “Regulations designed for traditional exploration and production in Amsterdam. “We expect Europe to be a significant part of future activity.”
Poland Leads the Way
Poland plays host to Europe’s largest known reserves of shale gas. Leasing activity in the country’s three main basins—the Baltic Basin, the Podlasie Basin in the east, and the Lublin Basin to the south—is well under way. The country is keen to push forward with shale gas production as it looks to break away from its reliance on Russian gas supplies.
The US Energy Information Administration (EIA) estimates that Poland has 792 Tcf of risked shale gas in place, with 514 Tcf in the Baltic Basin, 222 Tcf in the Lublin Basin, and the remainder in the Podlasie Basin. Chevron and ExxonMobil have been joined by a large number of smaller players such as DPV Service, Cuadrilla, EUR Energy, and Mazovia Energy in securing acreage across the country.
Talisman is carrying out seismic acquisition on con-cessions in the Baltic Basin and it is on track to spud its first two shale gas wells in the fourth quarter of this year, the company said. It moved into the Polish plays through a farm-in arrangement with San Leon Energy for a 60% interest in San Leon’s three concessions. Talisman is committed to drilling a minimum of three wells—Gdansk-W, Braniewo-S, and Szczawno—which cover 600,000 acres. Three optional wells with horizontal sections will be drilled after a successful first phase of testing. San Leon is also engaged in a five-year exploration and development program on its two concessions, Nowa Sol and Wschowa in the Permian Basin South. Both concessions are on trend with prolific Rotliegendes gas and Zechstein oil production.
Nexen recently entered into an agreement with Marathon to jointly explore 10 concessions in Poland’s Paleozoic shale play and it says it will pump USD 100 million into shale-related activities. Nexen will acquire a 40% working interest in the concessions, which encompass more than 2 million acres. Marathon is acquiring 2D seismic this year and plans to drill one or two wells in the fourth quarter and potentially seven or eight wells during 2012.