Independence through extraction for Ukraine

Ukraine seems interested in developing own shale gas resources as a diversification from predominant Russian imports, but the business climate in the country looks problematic. The state is very interested in energy projects; however investors are cautious of moving into Ukraine’s energy business at the moment, as this often meant joining up or competing with state-based organizations, or groups that could be linked to state officials or their relatives.

Ukraine has significant shale oil gas reserves, according to the existing estimates, equal to those of Sweden and roughly one quarter of the reserves of the major reserve holders Poland and France. OECD/IEA indicates roughly 1,100bn m3 of gas reserves. Wood Mackenzie however indicates  that the Lublin basin, in Poland, could have reserves in excess of 1,400bn m3 and have equal reserves in the Ukrainian portion of the basin.

Main shale gas basins in Ukraine [Source: Advanced Resources International, IntelliNews]

With Europe’s fourth largest shale gas reserves according to the OECD/IEA, and hopes for even more as supported by prognoses like those put forth Wood Mackenzie and others, the production stakes in Ukraine have aroused international interest. Exploration on the Ukrainian side of the border so far has been narrow however.  This is largely the purview of internationals.  TNK-BP, Gazprom and Shell are looking at Ukrainian exploration. There are also several junior explorers, such as Eurogas, actively exploring in Ukraine.

This is only a small extract of the insights in the IntelliNews Special Report, Ukraine Shale Gas Sector; read more and purchase>>

 

Poland on the front line of shale gas extraction

Poland is in the front line of Europe’s shale gas operations. According to the Environment Ministry’s data, 18 research drillings were successfully conducted and 14 another were under preparation. Still these drills are not enough to reasonably assess the actual potential for commercial use of shale gas. Even if the existence of gas is confirmed, it does not necessarily mean that there is potential for commercial use. From the tests made so far, the only concession, which may hold a satisfying amount of gas is PGNiG’s Wejherowo concession in Lubocin.

Apart from uncertain resources, experts mention several other potential barriers, which may increase the risk for shale gas investors in Poland and may even make such investments unreasonable:

• Protectionism of local service sector especially regarding drilling firms
• Restrictions to foreign drilling firms to enter the Polish market (for example a requirement to operators of drilling equipment to have local permissions)
• Long lasting procedures for importing the drilling equipment from outside the EU
• The necessity to announce tenders for drilling operations;
• Uncertainty concerning the price of gas on the regulated market;
• Complicated regulation concerning access to geological information and high price of such information;
• Changing and unclear regulation regarding the environment protection.

This is only a short extract from all the insights provided in the IntelliNews Special Report, Poland Shale Gas Sector; read more and purchase>>

 

Shale gas extraction boom in Eastern Europe: fact or fiction?

In the US, 12 years after the start of significant operation, shale gas flows reached some 170bn m3. The real impact was visible in the second half of the cycle, when supplementary non-conventional gas pushed exports and consumption up and imports down.

Will this be the case in Europe? Our findings point to the fact that even if certain areas of the continent (Eastern Europe particularly) are strongly interested in grasping this opportunity, a would-be shale boom in Europe reach neither the magnitude nor the speed of development seen in the US.

Europe will rather seek to diversify its external gas resources by building LNG terminals or investing in pipeline to gas rich regions. Actually, the shale gas at global level will not reach the magnitude seen in the US recently, as suggested by the consensus projections.

More detail, including extensive analysis of markets, technologies, political landscape and specific businesses, in the IntelliNews special report, East Europe Shale Gas Sector; read more and purchase>>