Shale Gas Investment Guide vol. 8

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Guide

Shale GaS investmentwinter 2014

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4 | Shale Ga S Inve S tm ent GuIde | Winter 2013

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6 | Shale Ga S Inve S tm ent GuIde | winter 2014

Contents

24Keep Calmand Frack on


52

p / 1 3 INDICATORS

p / 2 0 TRENDING

p / 2 4 UKFOCUS• Turning Point, 2015• Fit for Purpose?• UK, the New Poland• Tough Road Ahead• Fracking’s Material Challenge• Hutton Energy• Reputation is Everything• Here comes the sun

p / 5 0 PrivateEquityinShortSupply

p / 5 4PGNiG: Down to Earth

p / 5 6Strategic Water

p / 6 4GlobalUpdate:EnemiesofNewOrder

p / 6 8Best technologies

p / 7 0Small-scale LNG

p / 7 2Release Gas, trap CO2

p / 7 4WHO’SWHO:EU

p / 9 4SERVICES DIRECTORY

p / 1 1 4Wellhead:AndrewAustin,IGas

CO

NT

EN

TS

110

PolandShaleCoalition

EUMarketUpdate

64GlobalUpdate


Shifting Paradigm

B y w o j c i e c h k o ś ć

The hopes for a quick change that European shale gas might bring about have given way to a more sober view that the change will rather come at a pace typical for the oil and gas industry, which is slow.

opinion

With an easier permitting regime and land-owners profitting from whatever oil and gas companies could find on their land, it still took three decades for shale gas to transform America’s energy mix.

As shale gas plays like the Marcellus are far from depletion and technological advances allow frackers to go back to wells thought spent, gas from shales is going to flow. It is

now estimated that by 2025, the US will pro-duce more energy at home than it wi l l need, for the first time in close to 60 years.

The European op-erators look at the US as a country of refer-ence and never miss an opportunity to say what they would give for the EU to let go of procedures and the traditional govern-ment, rather than private, ownership of

mineral resources. But they are looking at the US, which is after a long period of develop-ment, while Europe is only just beginning.

The early excitement about the European - mostly Polish, now also British - shale gas was an effect of the rather unsophisticated applica-tion of knowledge about unconventionals

exploration amassed in America. The disap-pointment was then inevitable because Polish and UK shales are very different from US ones.

Those companies that have not given in yet, like San Leon Energy or Orlen Upstream, are now pretty open about the necessity to fine-tune fracking technology in order to tailor it to Polish geology.

They are also frank that it is going to take time. It might be a little less time in the UK, where the key shale play, the Bowland, is ten times thicker than the US’s Barnett and stretches along a mere 200 kilometers from West to East Midlands. This, according to market insiders, should bring answers to key questions sooner than in Poland.

There exists some pressure, however, to prove the European shale gas acreage sooner rather than later, as the chief supplier of many EU member states, Russia, has fallen out of favor with Europe, following its slow-motion inva-sion of Ukraine.

Given the EU’s most recent climate and en-ergy targets - 40 percent cut in emissions, 27 percent share of renewables in the mix, 30 percent improvement in energy efficiency - domestically produced natural gas could come in handy as a means to reduce the cost of en-ergy imports, while Europe marches toward decarbonization of its economy. An immediate leap to renewables seems unlikely at the mo-ment. Let gas - despite its fossil fuel credentials - play a role while it is still possible.

An immediate leap to renewables seems

unlikely at the moment. Let gas -

despite its fossil fuel credentials - play a

role while it is still possible


EDiToR in CHiEFwojcIech KoSc

pUBLiSHERparKer Snyder

ART DiRECToRŁuK aSz ma zureK

ConCEpT DESignpaIGe weIr

pRinCipAL AnALYSTpIotr wdowInSKI

CoMMUniCATionSGabor chodKowSKI- GyurIcS

CopY EDiToRSmarynIa KruK, jo harper

HiRED! MAnAging EDiToRjan w ypIjewSKI

HiRED! WRiTERSr adeK budzowSKI, hubert K aron, pIotr lewandowSKI, edy ta Stopyr a , Gordon waSIlewSKI, dawId wIer zbIcKI

WRiTERSpaul Garret t In memorIam

nIlIma choudhury (london), Gabor chodKowSKI- GyurIcS, rhodrI davIeS (buenoS aIreS), davId GacS (buenoS aIreS), tIm GoSlInG (moScow, praGue), andrew hobbS (perth), mIrona hrItcu (buchareSt),

lInaS jeGelIvIcIuS ( vIlnIuS), StanISŁaw Koczot, jaKub Koczot, julIuSz Kowalcz yK, Ian lewIS (london), Sar a lIchwa (london), zuz anna marchant (london), nIKolay marchenKo (SofIa), jerIn mathew (banGalore),

wu mInG (beIjInG), nIchol aS newman (london), GreG penfold (cape town), Sonja van renSSen (bruSSelS), claudIa perez rIvaS (tex aS), Graham StacK (KIev ), domInIc SwIre (beIjInG), alIce trudelle (Quebec),

Gordon waSIlewSKI, jude webber (mexIco cIt y )

EXpERT ConTRiBUToRSolGa andrIenKo-bentz, jaceK cIborSKI, pIotr dobrowolSKI, florence Geny, GrzeGorz KuS,

drew leIfheIt, eva-marIa macIazeK, paweŁ poprawa, elena revutSKaya, wojcIech SŁowInSKI

EDiToRiAL ConTACTwojcIech KoSc, wojcIech@cleantechpol and.com, (+48) 602 458 099

ADVERTiSing ConTACTweStern europe, ScandInavIa: jane baIley, jane@cleantechpol and.com, (+4 4) 750 3 47 1415

mIddle eaSt, centr al & eaStern europe: parKer Snyder, parKer@cleantechpol and.com, (+48) 517 469 881

pUBLiCATion pARTnERSch robInSon, dtz, hayS, nutech, pwc , rISK to reputatIon, SSw

gUEST CoLUMniSTSfr anK maIo, K athryn z. Kl aber, K amleSh parmar, andrew auStIn

KEY pHoTogRApHYlou denIm, Km r atSchK a , Konr ad SIeron, Sz ymon SzczeSnIaK

DTpma zureK Gr afIK a , www. ma zureKGr afIK a .pl

pRinTERdruK arnIa beltr anI, www.druK arnIabeltr anI.pl, Kr aKów,

DiSTRiBUTiontm medIa , al. jana pawŁ a II 61/239, 00 -117, warSaw

SUBSCRipTionthe Shale GaS InveStment GuIde IS prInted two tImeS a year. the maGazIne IS dIrect maIled to all lIcenSed

operatorS for unconventIonal oIl and GaS In the eu-28. to SubScrIbe, wrIte to [email protected].

pUBLiSHERcleantech pol and llc , ul. Krucz a 51/31, 00 - 022 warSaw, pol and

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To become a partner for the magazine, please contact

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CommercialpartnersThe American Chamber

of Commerce (AmCham) is a business organization that serves and promotes its member companies.

AmCham fosters positive relationships with the government

and promotes the free market spirit. www.amcham.com.pl

Cleantech poland is a consultancy for oil and gas

providing representation services. Cleantech Poland publishes the

Shale Gas Investment Guide and the magazine Cleantech.

www.cleantechpoland.com

poland Shale Coalition is an industry organization open to anyone. The Poland Shale Coalition, founded in 2013, aims at education

and outreach. Founding members of the Poland Shale Coalition receive

outreach in their concessions.www.shalecoalition.pl

DTZ is a property services company,

providing occupiers and investors with end-to-end property solutions, global and local market knowledge,

forecasting and trend analysis.www.dtz.pl

pwCPwC provides oil and gas companies with services in assurance, advisory

and tax & legal. A global services company, PwC has been in Poland

for 20 years and counts many of the largest oil and gas

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SSWSSW provides comprehensive tax and legal advisory services. SSW, whose main practice areas are energy and natural resources, advises investors on the business implications of the

government’s proposed changes to oil and gas laws.

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AmCham 10Cleantech 13DTZ 92CH Robinson 59HAYS 68NuTech 33PSC 110PwC 17R2R 42SSW 19DireCtOrY 94

Find us


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PwC Your trusted oil & gas and chemical advisor

Business Advisory

Wojciech Słowiński – Partnerphone: +48 502 184 [email protected]

For years, we support our clients with knowledge and market experience by providingbusiness advisory, tax and legal advisory, audit and accounting consultancy. We are happy to talk with you about the needs of your business.

© 2013 PwC. All rights reserved. PwC refers to the companies associated in the PricewaterhouseCoopers International Limited (PwCIL), each member of which is a separate legal entity and does not act on behalf of PwCIL or other member firms.

Tax and Legal Advisory

Tomasz Barańczyk – Partnerphone: +48 502 184 [email protected]

pwc_210x297_Eng 13-9-24 17:32 Strona 1


I Ind c a t r soGuide

Shale GaS investment

B y P i o t r W d o W i ń s k i P r i n c i Pa l a n a lys t c l e a n t e c h P o l a n d

E X P E R T V I E W


Source: cleantech Poland reSearch* TC - total concessions, NW - new wells (Q3, 2014)For detailed information about country specifics, please see "who's who section" on the page 74

0

100

200

300

400

500

600Others

United Kingdom

Sweden

Spain

Poland

Germany

2014 Q42014 Q32014 Q22014 Q1

0

100

200

300

400

500

6002014 Q42014 Q32014 Q22014 Q1

0

500

1,000

1,500

2,000

2,500

Others

United Kingdom

Sweden

Spain

Poland

Germany

No. of wells

Concessions Wells Concessions Wells Concessions Wells Concessions Wells

EU UNCoNVENTIoNal oIl & gas: sTaTE of Play

Source: cleantech Poland reSearch

M o s T a C T I V E E X P lo R E R sunconventional eu28 oil and Gas

BY COMPANY

� on top of the unimpressive pace of exploration in Europe to date, there lies a political question: what direction will the new European Commission (in office since November 1) give the EU in terms of development of its energy mix? The Commission will definitely want to address the issue of some €400bn that the bloc pays each year for energy imports, much of it for gas.

EU27

www.pwc.pl

PwC Your trusted oil & gas and chemical advisor

Business Advisory

Wojciech Słowiński – Partnerphone: +48 502 184 [email protected]

For years, we support our clients with knowledge and market experience by providingbusiness advisory, tax and legal advisory, audit and accounting consultancy. We are happy to talk with you about the needs of your business.

© 2013 PwC. All rights reserved. PwC refers to the companies associated in the PricewaterhouseCoopers International Limited (PwCIL), each member of which is a separate legal entity and does not act on behalf of PwCIL or other member firms.

Tax and Legal Advisory

Tomasz Barańczyk – Partnerphone: +48 502 184 [email protected]

pwc_210x297_Eng 13-9-24 17:32 Strona 1

� Over the last half year, the number of European unconventional oil and gas wells drilled has increased, although the market in general is sluggish. The current hot spot is the UK: all eyes are on the upcoming results of the 14th onshore licensing round, expected to boost shale gas exploration on the back of esti-mated good geology in the Bowland play. Exploration in Poland is on-going but has been fading of late. On the other hand, Denmark will see its first shale gas well by Q1 2015, drilled by Total E&P Denmark and state-owned Danish North Sea Fund. Elsewhere in Europe, shale gas is hardly in favor with authorities, whom have a decisive say in getting exploration off the ground, as typically governments own the rights to mineral resources. The Netherlands and Ireland have both put a temporary ban on fracking ahead of further research, delaying decisions on drilling permits for unconventional oil and gas. Germany has introduced rigorous rules to regulate unconventional oil and gas that include a ban on coal bed methane and shale gas drilling up to 3000 meters deep until 2021. Bulgaria, France, Luxembourg and the Canton of Fribourg in Switzerland are also keeping moratoria on exploratory drilling. Exploration is stumbling in Northern Ire-land and Spain. In Poland, 3Legs Resources has decided to give up on its Baltic concessions after disappointing results from a production test at the Lublewo LEP-1ST1H well. San Leon Energy and ConocoPhillips continue to say publicly that they will continue works on their concessions. Other active operators are BNK Petroleum, Chevron and state-controlled PGNiG and Orlen Upstream.

company change in conc. Q1 - Q3 2014 country tc* nW*

iGas ↑ (+31) UK 38 1

egdon resources ↑ (+12) UK 23 -

Palomar natural resources ↑ (+3) PL 0 -

ineos ↑ (+2) UK 0 1

GdF suez sa ↑ (+25%) in 12 conc. DE, UK 16 2

conocoPhillips ↑ (+30%) in 3 conc. PL 3 -

total e&P uk ltd ↑ (+40%) in 2 conc(+50%) in 1 UK 0 -

aB igrene - SE 25 1

Gripen oil & Gas - SE 21 1

orlen upstream - PL 9 1

hutton energy - PL 3 -

BasF - Wintershall - DE 9 -

shesa - ES 5 -

total e&P denmark Bv - DK 2 -

nordsøfonden - DK - -

ascent resources - SK 1 -

cuadrilla resources ↓ (-1) PL, UK, NL 8 -

chevron ↓ (-1) PL, RO, (LT) 9 1

exxonMobil ↓ (-2) DE, (PL) 20 -

3legs resources Plc ↓ (-3) PL 3 -

PGniG ↓ (-4) PL 16 3

Bnk Petroleum inc ↓ (-5) PL, ES, (DE) 10 -

Petrolinvest ↓ (-6) PL 9 -

san leon energy Plc ↓ (-10) PL, ES, (DE), (SK) 26 -

dart energy ↓ (-31) UK 31 3

14 | shale Ga s Inve s tm ent GuIde | WINTER 2013 | shale Ga s Inve s tm ent GuIde | sUMMER 2013

T



14 | shale Ga s Inve s tm ent GuIde | WINTER 2014

UK

� the uk is highly dependent on offshore gas, which pro-vides about 98% of domestic production, concentrated in the North Sea gas fields. Still, domestic production covers only half of demand so the remainder has to be covered by imports, mainly from Norway, Qatar, the Netherlands and Belgium. As the North Sea fields deplete, however, the imports are set to grow unless the UK finds a new source of domestic supply. Hence the government's current push for shale gas. It could be a weighty political issue, because, unlike in Poland, gas in the UK is mainly used in households.

CoMMENTaRy

PL-SK

PL-DE Lasów

PL-DE Mallnow(reverse)

PL-CZ

LNG Świnoujście

Cardi�

Belfast

59%

Edinburgh

Manchester

Birmingham

LONDON

Aberdeen

Łódź

Poznań

Wrocław

Rzeszów

Olsztyn

Gdańsk

Szczecin

WARSZAWA

Lublin

Bydgoszcz

KatowiceKraków

St. Fergus

Tesside

Bacton

MilfordHaven

Norway

Norway

Holland

Belgium

Qatar

Germany

Czech Rep.

existing

planned

Russia& CentralAsia

g a s P R o D U C T I o N

category BcM %

onshore 0.01 2.1%

offshore 38.09 97.9%

total 38.9 100%Source: uK Government

s U P P ly by s o U R C E2013 BCM

source of gas supply (2013) capacity

supply from domestic production 39

Pipeline imports - eea 39.8

Pipeline imports - non-eea 0

lnG imports (excluding small lnG) 9.4Source: ure, uK Government

s T o R a g E fa C I l I T I E s2013 BCM

Facility type capacity

onshore 16

offshore 4

Working capacity (bcm) 4.2

storage capacity to consumption ratio 5.70%

storage level as of 23 sep 2014 (%) 95%Source: ure, uK Government, enerGoStat

7%

47%25%

21%

26%

27%

43%

4%

Other

Household use

Industry

Power generation

Other

Household use

Industry

Power generation

gas CoNsUMPTIoN, 2013

Source: uK Government

� the map above shows UK transmission network and most important countries of import. Above right, breakdown of import volumes by country of origin. At right, the UK power gen-eration accounts for 26% (19 bcm) of the total gas usage, about three times more than in PL.

0

100

200

300

400

500

600Others

United Kingdom

Sweden

Spain

Poland

Germany

2014 Q42014 Q32014 Q22014 Q1

0

100

200

300

400

500

6002014 Q42014 Q32014 Q22014 Q1

0

500

1,000

1,500

2,000

2,500

Others

United Kingdom

Sweden

Spain

Poland

Germany

No. of wells


0102030405060708090

100

CzechBelarusUkraineGermay

0102030405060708090

100

BelgiumHollandQatarNorway

%

10

20

30

40

50

60

70

80

90

100

BelgiumHollandQatarNorway%

10

20

30

40

50

60

70

80

90

100

Czech Rep.Russia& Central Asia

Germany

IMPoRT oRIgINs, 2013

� the uk's dependency on imports does not create so much tension as in Poland, but rising costs and decreasing resources have London look at shale gas to prop up supply.

2013 BCM

Source: cleantech Poland, decc

w w w.cle antechpol and.com | 15w w w.cle antechpol and.com | 15




� Poland is only slightly more dependent on gas imports than the UK, but the problem is that it is dependent on a historic enemy Russia, which has been viewed as unreliable political and business partner of late, following the crisis it instigated in Ukraine. In 2013, the country gas production covered approximately 30% of domestic demand. No less than a revolution in the supply structure might be on the cards, however. Poland wants to diversify supplies using an LNG terminal (7.5 bcm capacity), coming online in 2015, that will take gas under a signed contract with Qatar. Poland also hopes to develop its estimated 350-780 tcm of shale gas.

CoMMENTaRy

PL

g a s P R o D U C T I o N 2013 BCM

category BcM %

onshore 5.48 99.7%

offshore 0.02 0.3%

total 5.5 100%Source: PGniG, ure

s U P P ly by s o U R C E2013 BCM

source of gas supply (2013) capacity

supply from domestic production 4.4

Pipeline imports - eea 2.6

Pipeline imports - non-eea 11.87

lnG imports (excluding small lnG) 0Source: PGniG, ure

s T o R a g E fa C I l I T I E s2013 BCM

Facility type capacity

onshore 7

offshore 0

Working capacity (bcm) 2.5

storage capacity to consumption ratio 15.72%

storage level as of 23 sep 2014 (%) 99%Source: PGniG, ure

PL-SK

PL-DE Lasów


PL-CZ

LNG Świnoujście

Cardi�

Belfast

59%

Edinburgh

Manchester

Birmingham

LONDON

Aberdeen

Łódź

Poznań

Wrocław

Rzeszów

Olsztyn

Gdańsk

Szczecin

WARSZAWA

Lublin

Bydgoszcz

KatowiceKraków

St. Fergus

Tesside

Bacton

MilfordHaven

Norway

Norway

Holland

Belgium

Qatar

Germany

Czech Rep.

existing

planned

Russia& CentralAsia

7%

47%25%

21%

26%

27%

43%

4%

Other

Household use

Industry

Power generation

Other

Household use

Industry

Power generation

gas CoNsUMPTIoN, 2013

Source: PGniG, PGi

� in coal-reliant Poland, only 7% (1 bcm) of gas is used for power generation (left). Above left, breakdown of gas imports by country of origin. The map shows Poland's transmission network, existing/planned gas entry points, and LNG terminal in Świnoujście (operational from 2015).

0

100

200

300

400

500

600Others

United Kingdom

Sweden

Spain

Poland

Germany

2014 Q42014 Q32014 Q22014 Q1

0

100

200

300

400

500

6002014 Q42014 Q32014 Q22014 Q1

0

500

1,000

1,500

2,000

2,500

Others

United Kingdom

Sweden

Spain

Poland

Germany

No. of wells


0102030405060708090

100

CzechBelarusUkraineGermay

0102030405060708090

100

BelgiumHollandQatarNorway

%

10

20

30

40

50

60

70

80

90

100

BelgiumHollandQatarNorway%

10

20

30

40

50

60

70

80

90

100

Czech Rep.Russia& Central Asia

Germany

gas INfloWs, 2013

PL-SK

PL-DE Lasów


PL-CZ

LNG Świnoujście

Cardi�

Belfast

59%

Edinburgh

Manchester

Birmingham

LONDON

Aberdeen

Łódź

Poznań

Wrocław

Rzeszów

Olsztyn

Gdańsk

Szczecin

WARSZAWA

Lublin

Bydgoszcz

KatowiceKraków

St. Fergus

Tesside

Bacton

MilfordHaven

Norway

Norway

Holland

Belgium

Qatar

Germany

Czech Rep.

existing

planned

Russia& CentralAsia

� since april 2014, Po-land has been able to get gas from Germany (even though gas is Russian by origin) via a so-called real reverse mechanism, allow-ing Poland to pump gas via the Yamal pipeline.

Source: Pwc elaboration baSed on GaS inFraStructure euroPe

16 | shale Ga s Inve s tm ent GuIde | WINTER 201316 | shale Ga s Inve s tm ent GuIde | WINTER 2014



� During the hearings for the candi-date to the post of Energy Union Com-missioner, Maroš sefcovic, a lot was said about the EU’s dependence on energy imports, including gas. little talk, however, focused on one of the possible ways to reduce gas imports, that is, its extraction from European shales. What kind of policy from the new European Commission towards shale gas would you like to see?As we know, policy is first of all based on setting up an objective, which, in

the case of shale gas, will mean launch-ing its industrial production, and secondly on considering the most ef-fective methods leading to that goal. In the past, lobby groups in the Euro-pean Parliament did a lot to discour-age member states from unconven-tional natural gas resources. It seems, however, that the new commission will leave these issues at the discretion of member states, providing of course that they maintain EU environmental standards, both during exploration and future production. However, we must bear in mind that what we cur-rently know about shale gas in Poland does not provide much ground for consideration of shale gas resources as a factor in on Poland’s long-term gas import plans.

Complete studies are needed on Pol-ish geology and then economic analy-ses. And this is what I would like the future policy of the new European Commission to be.

� How do you think the gas market in Europe is going to change once t h e f l o a t i n g l N g t e r m i n a l i n Klaipeda and the lNg terminal in swinoujscie start operating? Will this enable the baltic countries and Poland to become less dependent on gazprom or will it rather be a argument for price reductions in purchasing gas from the Russian company?Liquefied gas, both from floating and at stationary LNG terminals, is always more expensive due to the technology

– first it is compressed, and then de-compressed. Besides, there are the costs of transporting LNG to countries that contract it. The possibility of us-ing imported LNG will definitely in-crease energy security, especially of the Baltic countries. But will this in-crease economic competitiveness? I am afraid it will not. I also fear it will not result in a price reduction of gas purchased from Russia. And it is en-ergy prices that determine, for the time being at least, competitiveness, not only in Poland but in the whole of the European Union on global mar-kets.

� How do you assess the EU emis-sions reduction target adopted at the end of october?These EU regulatory objectives mean a further tightening of the EU’s climate policy, or the reduction of carbon emissions, by at least 40 percent with 1990 as the baseline year, an increase in renewables’ share by at least 27 percent and an increase in energy ef-ficiency of up to 30 percent. The emis-sions reduction objective in the case of Poland, where GDP is below 60 percent of the EU average, will mean that the power industry will still be allowed to use free emission allow-ances. After 2020, however, it will account for no more than 40 percent of allowances verified after backload-ing has kicked in, which per account balance will necessitate the need to purchase allowances and potentially result in rising electricity prices.

E X P E R T I N T E R V I E W

sGiG speaks to Prof. adam Gierek, Mem-ber of the european Parliament for so-cialists and democrats and a member of the parliamentary committee of indus-try, research and energy. the eP has re-cently green-lighted the new european commission under the presidency of for-mer prime minister of luxembourg Jean-claude Juncker. the Juncker commis-sion, it appears, will attach great importance to the issues of european en-ergy, with the creation of a new portfolio for the commission’s vice president for energy union. the idea of the energy union is to make the eu a unified voice in issues such as energy imports, gas in particular, and to make the 28-country bloc’s effort to use less energy more ef-fective.

P r o F . a d a M G i e r e k

MEP, Group of the Progressive Alliance of Socialists and Democrats

“lobby groups did a lot to discourage member states from unconventional natural

gas resources. it seems, however, that the new commission will leave these issues at the

discretion of member states”

EU

w w w.cle antechpol and.com | 17w w w.cle antechpol and.com | 17



� A surge in development of LNG ter-minals in the Baltic Sea area provides an interesting perspective for the LNG mar-ket in Central and Northern Europe. The opening of Lithuania’s floating “Indepen-dence” terminal in Klaipeda is now a fact. The Polish terminal in Świnoujście, which will become operational in 2015, looks set to be another game changer. With 5 billion cubic meters (bcm) of initial annual ca-pacity - let alone target capacity of 7.5 bcm - Świnoujście will considerably alter the geography of Polish gas imports. In plans, there also is a new terminal in Estonia and a liquefaction plant in Sankt Petersburg, Russia. Within the next couple years, the market in this part of Europe looks set to be strongly stacked with LNG terminals and this could be both an opportunity and a challenge. Operators may face the question of how to manage high amounts of LNG. A partial answer may come from Brus-sels. A new directive that will further limit sulphur content in marine fuel oils, enters into force from 2015. LNG bunker-ing for marine transport purposes may become a new market, growing from 0.07m tonnes currently to 1.4-2.2m tonnes in 2020, according to a recent forecast from IHS, a market analytics company. LNG is a completely new market seg-ment for local gas companies in the Baltic Sea area. A fast growth of this market demands gaining new skills, not only in the traditional LNG trading, but also in new emerging niches, that may serve as a springboard into the world of big LNG.

E X P E R T V I E W

P a W e Ł d o B r o W o l s k i d e P u t y d i r e c t o r , P W c

location country regasification capacity (bcm)

sines Portugal 7,9

huelva Spain 11,8

cartagena Spain 11,8

sagunto Spain 8,8

Barcelona Spain 17,1

Bilbao Spain 7

Mugardos Spain 3,6

Fos tonkin France 5,5

Fos cavaou France 8,25

Montoir de Bretagne France 10

Zeebrugge Belgium 9

rotterdam Netherlands 12

Panigaglia Italy 3,4

Porto levante Italy 7,56

revithoussa Greece 5,3

Milford haven (south hook ) United Kingdom 21

Milford haven (dragon lnG) United Kingdom 6

teesside United Kingdom 4,6

isle of Grain United Kingdom 19,5

Gijon (Musel) * Spain 7

dunkerque * France 13

toscana offshore * Italy 3,75

klaipeda * Lithuania 4

Świnoujście * Poland 5

> 90%

51-89%

< 10%

11-50%

existingunder construction

LNG Terminalsin ContinentalEurope:

Algeria, Libya9%

Russia

24%

Norway

22%

12%

LNG:Qatar, AlgeriaEgypt, Nigeria, Peru, Trinidad and Tobago

Sou

rce: Pw

c elabo

ration

baSed o

n eu

roG

aS StatiStical rePo

rt 2013, GaS in

FraStruc

ture eu

roPe, en

i wo

rld o

il and

GaS review

2013

Source: Pwc elaboration baSed on GaS inFraStructure euroPe

l N g ' s E N T Ry P o I N T seXistinG and under construction (*)

LNG TERMINALS IN EUROPE

� Most European countries are dependent on imported Russian gas in at least 11%. Several coun-tries, mainly in Central and Eastern Europe, are getting close to 100% of their gas from Russia, which is creating a strategic disadvantage and a political problem. Poland has recently proposed that the EU negotiates gas purchases from Russia as a bloc, develops domes-tic production and works to in-crease supplies from Middle East and North Africa.

TIED To THE EasT

� the Polish lnG terminal is scheduled for delivery at the end of 2014. Its initial regasification capacity will be 5 billion cubic metres (bcm) annually, to be expanded to 7.5 bcm, which would cover some 50% of the annual Polish gas demand.

EUEU

18 | shale Ga s Inve s tm ent GuIde | WINTER 2013 | shale Ga s Inve s tm ent GuIde | sUMMER 2013



18 | shale Ga s Inve s tm ent GuIde | WINTER 2014

E X P E R T V I E W

olGa andrienko-BentZ director, enerGy GrouP, PWc ukraine

� Oil and gas sector in Ukraine is on the verge of an incredible transformation. Integration into European networks, upgrade to the modern standards and overall market liberalization open tre-mendous opportunities. With almost 20% share in total EU-28 gas storage capacities and accounting for 17% of Europe’s gas consumption with its transportation capacity, Ukraine is bound to play an important role in the region. On the other hand, the country faces a very difficult challenge of increasing its energy efficiency as well as finding ways to assure energy independence. Both are interdependent, geopolitical pressures providing for additional stimulus to

urgently starting closing the 30-40% energy efficiency gap, which has hardly been tackled during the last 20 years. The government has launched an am-bitious reform program, including har-monization of the national legislation with the EU norms, reforming the pricing system, introducing market principles, reforming the national oil and gas com-pany Naftohaz, improving the indepen-dence of the regulatory authority, as well as modernization of Ukraine’s gas trans-portation system. The success of this transformation depends on political will of the Ukrai-nian government, as well as coordi-nated and consistent efforts of interna-tional community.

Changes to the Geological and Mining Act – practical consequences for exploration and mining companies

The conference that the mining sector has been waiting for

Warsaw, 13th - 14th January 2015

Details:

www.ssw.pl

reklama Górnictwo.indd 3 2014-11-07 13:55:13

elena revutskaya senior consultant, PWc ukraine

� ukraine has 12 under-ground gas storage facilities, with total active capacity of about 31 bcm. Storages and system of trunk pipelines are operated by Ukrtransgaz, a 100% state-owned entity. Total EU-28 natural gas stocks are 78.2 bcm and Ukrainian stocks are 15.9 bcm as of November 2014.

UKRaINE aND THE EURoPEaN gas sECToR

Ukraine

Other EU-28

Italy

France

Germany

15

16

17

18

19

20

21

22

23

24

25

2014**2013*20122011201020092008

17%

17%

12%

23%

Russia Ukraine Europe

Transit and export to Ukraine

111 bcm

Transit

86 bcm

Reverse 2bcm

Transit through other countries 76.4bcm

Poland

29%

3%

� ukraine has Europe's third biggest storage capacity, behind Germany and Italy.

Ukraine

Other EU-28

Italy

France

Germany

15

16

17

18

19

20

21

22

23

24

25

2014**2013*20122011201020092008

17%

17%

12%

23%



111 bcm

Transit

86 bcm

Reverse 2bcm


Poland

29%

3%

sToRagE CaPaCITy Vs EU-28 gas TRaNsIT RUssIa-EU, % of UKRaINE CoNsUMPTIoN

� europe receives approximately 50% of its Russian gas importa via Ukraine. It was 80% before Nord Stream began operational.

Source: GaS inFraStructure euroPe eia, miniStry oF Fuel and enerGy oF uKraine, euroStat, euroGaS. * - the amount oF GaS conSumPtion waS taKen From euroGaS data(data For eu 28 and Switzerland) , **- the amount oF GaS conSumPtion waS ForecaSted by euroGaS (data For eu 28 and Switzerland). the value oF tranSit throuGh

� russian natural gas export to Ukraine decreased by 3.6 bcm to 16.1 bcm in the first nine months of 2014 in comparison with the same period of 2013. In 2014 Ukrtransgaz and Eustream agreed on reverse supplies of gas to Ukraine at a rate of up to 8 billion cubic meters per year. Ukraine is developing reverse routes of gas supplies from Hungary, Poland, Slovakia and Romania. Opening all four routes will allow Ukraine to in-crease annual gas deliveries to 25 billion cubic meters.

bETWEEN RoCK aND a HaRD PlaCE?

Ukraine

Other EU-28

Italy

France

Germany

15

16

17

18

19

20

21

22

23

24

25

2014**2013*20122011201020092008

17%

17%

12%

23%



111 bcm

Transit

86 bcm

Reverse 2bcm


Poland

29%

3%

Source: britiSh Petroleum StatiStical review oF world enerGy June 2014, GazProm materialS, miniStry oF Fuel and enerGy oF uKraine

UA

Changes to the Geological and Mining Act – practical consequences for exploration and mining companies

The conference that the mining sector has been waiting for

Warsaw, 13th - 14th January 2015

Details:

www.ssw.pl

reklama Górnictwo.indd 3 2014-11-07 13:55:13

gas TRaNsIT RUssIa-EU, % of UKRaINE CoNsUMPTIoN


June 24/14

rasmussen: Russia diRects shale dissent

FACE

BOO

KMan for hire

June 14/14

German government proposes fracking restrictions June 18/14

FTS International and Sinopec to develop China shale gas

June 26/14

Greece, Spain, Denmark join Europe’s

shale gas effort

t nr e d I nG

June 30/14

NY court upholds state fracking ban

Former Secretary General oF nato, Anders Fogh Rasmussen, accused Russia of supporting anti-fracking movements so as to maintain Europe’s chief gas supplier. “I have met allies who can report that Russia, as part of their sophisticated information and disinfor-mation operations, engaged actively with so-called non-governmental organisations - environmental organisa-tions working against shale gas - to maintain European dependence on imported Russian gas,” Mr. Rasmussen said at London’s Chatham House, a foreign affairs think-tank, the UK press reported. Anti-fracking protests helped stop shale gas exploration in various European countries such as France, Germany or Bulgaria.

Green activists denied Mr. Rasmussen’s revelations and demanded that he either proved his statement or issued an apology. “The European authorities have published several studies demonstrating high risks involved in the fracking industry—as have leading scientists around the world. Does Mr. Rasmussen believe that these institutions and individuals are all Russian dupes?” a group of envi-ronmental organizations said in a letter.


July 10/14

exxon mobil, TPao to unlock tuRkish gas

phO

tOpi

n

turkey delights

July 21/14

Mexico lifts ban on foreign shale gas

investment

July 28/14

UK 14th O&G licensing round starts

July 21/14

China sTarTs Fuling Field commeRcial e&p

wiK

ipEd

iA

daily output on the rise

Tr

en

di

ng

exxon mobil announced that the Turkish government approved an agreement between its local affiliate and the national oil company Türkiye Petrolleri Anonim Ortaklığı (TPAO) to explore two deepwater blocks in the Black Sea, signed back in 2008. Further talks are pending about joint prospecting in the region of Thrace and in southeastern part of the country.

The agreement concerns a combined area of about 30,000 km2 including deepwater prospects in the Black Sea at depths reaching 2,000 meters. Exxon Mobil will be the operator and will earn a 50% inter-est in acreage in question.

“TPAO and ExxonMobil will be working closely to-gether to assess the potential of these blocks. I believe that we will find commercial quantities of oil and gas,” said TPAO President and CEO Mehmet Uysal.

Exxon Mobil is also interested in exploring Thrace and the southeastern Dadas shale formation, estimated to potentially hold 1.3 trillion cubic meters of gas, where TPAO has drilled some wells in cooperation with Shell.

china’S miniStry oF land and reSourceS said last week that the Fuling field, China’s first large shale gas play, contained proven reserves of nearly 107 billion cubic metres of gas. The ministry’s announce-ment is considered an official launch of Fuling’s com-mercial development.

In June, the field’s operator, Chinese state owned oil and gas company Sinopec reached a daily output of 3.2 million cubic metres from 29 test wells. The company also stated that the gas contains as much as 98% methane, with low levels of carbon dioxide and no hydrogen sulphide.

China is eager to mirror the US shale boom, but indus-try experts warn that Fuling’s success might not be easily replicated elsewhere in the country. Fuling is considered to posses some of most favourable geological conditions in a country where drilling in other locations proved to have been complex and costly.

aug 6/14

Surge in Polish drilling activity: 3Legs, San Leon,

Orlen

aug 8/14

China halves 2020

shale gas output

estimate


3leGS reSourceS said that it would give up on their three concessions in the Baltic Basin in northern Poland, following lower than anticipated natural gas flow rates on the Lublewo LEP-1ST1H lateral well. “In view of the results to date of the Lublewo LEP1-ST1H well, which it considers to be at sub-commercial levels, and the further time needed to complete the remainder of the testing phase on the well when the prospects of a more successful outcome appear remote, the Com-pany has concluded that it would be in the best interests of its shareholders to exercise its option to withdraw from the three western Baltic Basin concessions,” 3Legs announced in a release on September 17.

According to 3Legs, the Lublewo well has produced at an average rate of 396 mscf/d natural gas and 157 b/d of light oil. “While it had been hoped that early hydrocarbon production rates might improve substan-tially as the well continued to flow back frac fluid, this has not yet occurred.”

Opp

pw

Man in the arena

sep 9/14

US fracking sand demand outpaces supply

sep 18/14

Argentina overhauls O&G law

t nr e d I nG

sep 17/14

Casing, CemenTing Risk to acquiFeRs

ClE

An

tEC

h p

OlA

nd

Blame at the top

neither horizontal drillinG nor hydraulic fracturing of shale deposits is responsible for drinking water contamination, according to a study led by Thom-as Darrah of the Ohio State University, published in the “Proceedings of the National Academy of Sciences”. Analysis of eight clusters of contaminated wells in Penn-sylvania and Texas showed that the source of the problem was faulty casing and cementing of the wells.

“These results appear to rule out the migration of meth-ane up into drinking water aquifers from depth because of horizontal drilling or hydraulic fracturing,” said Avner Vengosh, professor of geochemistry and water quality at Duke University. Using noble gas and hydrocarbon trac-ers, researchers identified and distinguished between signatures of naturally occurring methane and stray gas contamination from shale drill sites. Researchers analyzed gas content in 113 drinking-water wells and one natural methane seep in the Marcellus shale in Pennsylvania, and in 20 wells in the Barnett shale in Texas.

sep 23/14

Exxon Mobil halts activity in Russian Arctic sep 2914

UK changes trespass law to enable access to drilling sites

sep 17/14

3legs resourCes gives up Baltic acReage


oct 28/14

US energy independent by 2025: Wood Mackenzie

oct 28/14

Cuadrilla’s Lancashire operations approval

postponed

oct 27/14

Lithuania’s LNG terminal arrives to Klaipeda port

Tr

en

di

ngoct 21/14

ChrisToPhe de margerie ceo oF total, dies

chriStophe de marGerie, CEO of the French oil major Total, was killed on October 21, when his private jet collided with a snow plough at Moscow’s Vnukovo international airport. Mr. De Margerie, 63, was an at-tendee at a Russian government meeting on foreign invest-ment on October 20, where he had met the Russian prime minister, Dmitry Medvedev to discuss foreign investment in Russia, the Vedomosti business daily reported.

At a market value of €102 billion, Total is the fourth largest oil company in the world, behind Exxon, Royal Dutch Shell and Chevron.

The company under Mr. De Margerie was looking to-ward developing shale resources in England, Russia and Denmark. Following the accident, Total appointed Patrick Pouyanne as chief executive officer and Thierry Desmar-est as chairman until the end of 2015. The new CEO will have to “see through a round of cost cuts as lower oil prices and weak returns from refining eat into Total’s profits,” Bloomberg reported on October 22.

Mn

d

Blow out records

oct 14/14

us shale gas output at RecoRd high

natural GaS production reached an all-time high in the US in September, with average output of 69.1 billion cubic feet per day (Bcf/d), an increase of 7.4% year-on-year, according to an analysis by Platts’ Bentek Energy. Peak production was reached on September 15th, with a one-day high of 69.5 Bcf/d.

Shale gas production helped stabilize natural gas prices in the US at around $4 per mmbtu. European consumers pay $10 for the same amount, with Asian prices reaching up to $18.

Shale gas accounted for 1% of natural gas extracted in the US in 2000, while now it comprises roughly half of domestic gas production, allowing to reduce LNG imports from Africa, Middle East, or Canada.

Early data for October is suggesting that the new record won’t stand long. “After a month of lower trajectory growth, natural gas production is poised to shatter exist-ing records through the end of the year,” said Jack Weixel, director of energy analysis for Bentek Energy.

tOtA

l

Christophe de Margerie, 1951-2014

24 | Shale Ga S Inve S tm ent GuIde | Summer 2014


l Operations update p.26

l Licensing and permitting p.30

l UK, the new Poland p.32

l The 14th licensing round: tough road ahead p.34

l Fracking’s material challenge p.36

l Geology overview p.38

l Profile: Hutton Energy p.40

l Interview: Tom Vesey, Risk to Reputation p.42

l Feature: Here comes the sun p.44

CONTENTS

The UK is the new Poland. Not just because of the immigration from the central European

country. As the enthusiasm for shale gas in Poland seems to be waning, the super-thick

British shales start to fuel the imagination - and the protesters.

Keep Calmand

Frack On

U K F O C U S

26 | Shale Ga S Inve S tm ent GuIde | WINTer 2014

The UK is one of the few Euro-pean countries in which investors have high expectations that shale

gas exploration could be a commercial success by 2020.

British-owned Cuadrilla Resources, an independent pioneer of fracking in the UK, is one of 19 companies cur-rently racing to get British shale gas flowing, alongside French-owned oil and gas major Total and the Swiss-based chemicals company INEOS, which owns a refinery at Grangemouth, where it needs new sources of gas to convert into synthetic ethanol, ethyl-ene, propylene and polymers: polyeth-ylene and polypropylene. It is such companies that are expected to give exploration the kick that seems to have been lost in Poland, where drilling is going forward, but not yet with very promising results.

Asked about shale gas, the UK front-runners of the industry are still very wary about what they want to reveal. “It’s still very early days in this country. We don’t know yet if the American experience will happen here. A whole

lot more work needs to be done by the industry in exploration before we can say for sure,” said Andy Houldsworth of Cuadrilla Resources.

There is not much doubt that Mr. Houldsworth’s view that a lot more work is needed to be done is correct. According to Wood Mackenzie, a UK energy consultant company, merely six wells targeting shale plays in the UK have been drilled to date.

The UK Onshore Oil and Gas (UKOOG), an industry association, reported in July 2014 that current spending on fracking exploration can be counted in the tens of millions of pounds. Extracting oil from UK’s de-clining North Sea fields, which some claim shale gas will replace one day, will cost £14 billion this year alone.

ON THE GROUNDCurrently, the bulk of company activ-ity is focused on conducting further geological research in preparation for identifying promising test drilling sites. Companies are also busy preparing and submitting planning applications to

Shale gas operations in the UK are poised to recover in 2015 from the lull they have been in since the infamous seismic event on a Cuadrilla Resources site in 2011.

B y N i C h O l a S N e w m a N i N l O N d O N

Turning point, 2015O p e r a t i O N S U p d a t e

local authorities (see also p. 30). This seems to be the current state of play for the small independents, big companies and newcomer INEOS.

“Earlier this year, we submitted plan-ning applications for two exploratory sites located within our Bowland Basin licence area. We are planning to drill, hydraulically fracture and test the flow of gas from up to four exploration wells on each of the sites, one at Roseacre Wood and the other at Preston New Road over the next year,” said Mr. Houldsworth.

At least eight shale exploration com-panies are undertaking site preparation at prospective wells, including indepen-dents like privately owned Cuadrilla Resources and publicly listed IGas En-ergy, with the latter committed to drill and carry out flow tests at its licensed sites in the east Midlands and north west England.

In addition, Celtique Energie has an-nounced plans to start well site prepara-tions at its Broadford Bridge-1 well site in West Sussex in order to drill in win-ter 2014 or spring 2015 (see table, p.28).


UK

fo

cU

s

Two significant developments at gov-ernmental level promise to speed up exploration and drilling from next year. Firstly, the government is in the process of devising an attractive package of tax and regulations governing fracking. For instance, in 2013, the UK Treasury devised early-stage tax concessions for the shale industry.

Secondly, new laws are being de-signed to accommodate shale gas ex-ploration. Horizontal drilling and fracking will in part supersede the Tres-pass Laws. Before the next general election in May 2015, new legislation will be passed to allow companies drill-ing below 300 metres for oil and gas to have easier access under landowners’ property.

“[The government] has streamlined and simplified regulations and intro-duced the most competitive tax regime in Europe for shale gas, while maintain-ing robust environmental safeguards and making sure there is more informa-tion going to local communities,” the UK Minister of State for Energy Mat-thew Hancock MP said.

SEISMIC SURVEYSUnderpinning investor interest and much of the current exploration and

evaluation of licensed blocks are inde-pendent survey reports released by the British Geological Survey and Depart-ment of Energy and Climate Change.

The latest survey, dated June 2014 and covering the Midland Valley of Scotland,

estimated total-in-place-shale gas at between 1.40 trillion cubic metres (tcm) and 3.81 tcm.

A survey of the Bowland-Hodder basin in Lancashire, dated 2013, esti-mated 24-68 tcm (upper and lower units)

of shale gas, making this almost on a par with gas-in-place estimations for the Marcellus formation.

At company level, however, little seis-mic activity is currently underway. Nei-ther Cuadrilla Resources nor INEOS are going forward with any major seismic programs. This is likely to change in 2015. “Seismic will be one tool that our team will use in all exploration activity, to bet-ter understand the basin, to aid in iden-tifying the best geological location for exploration drilling, coring and ap-praisal,” said Hannah Brandstaetter, INEOS’ spokeswoman.

OBSTACLESIn general, the industry’s and govern-ment efforts to communicate and make the case for shale are far from successful.

The DECC public opinion tracker on attitudes towards fracking reported in August 2014 that public support and opposition is even at 24% each, while 47% said they neither supported nor op-posed fracking.

“Misinformation is a real obstacle to this technology. Getting the facts about safe on-shore gas extraction across to people will be a significant challenge,” said Ms. Brandstaetter. She adds that INEOS has hired some of the world’s

“Misinformation is a real obstacle to this technology. Getting

the facts about safe on-shore gas extraction across to people will be a

significant challenge”Hannah Brandstaetter,

INEOS

PHO

TOPI

N

28 | Shale Ga S Inve S tm ent GuIde | WINTer 2014

leading shale gas experts to make sure the gas can be safely extracted in an environ-mentally responsible way.

Given the lack of public support, it is not surprising that fracking companies are failing to gain planning permission to drill, hydraulically fracture and test wells. This is due to local politicians on the plan-ning approval committee who see grant-ing approval as a politically difficult.

“Cuadrilla and the industry as a whole, must keep on communicating, at local and national levels. It’s vital that the gen-eral public fully understands the potential benefits associated with UK shale gas, such as jobs, energy security and tax revenues,” said Mr. Houldsworth.

That said, a September 2014 paper from Professor Sarah O’Hara from the Univer-sity of Nottingham, published findings on the general public’s attitudes towards shale gas, a result of a series of surveys carried out from March 2012 to Septem-ber 2014 (see chart).

“The public was asked whether shale gas extraction in the UK should be allowed, a question intended to capture

people’s “all-things considered” judge-ment on shale,” wrote Professor O’Hara’s team.

In July 13, before the Balcombe pro-tests, which were widely reported and saw protesters forcibly removed from a Cuadrilla site, the survey revealed 58.3% in favor of shale gas extraction and 18.8% against.

Post-Balcombe, there was a decline “yes” and an increase in “no” respons-es that continued until May 2014 when the number of people who believe shale gas extraction should be allowed fell below 50%.

In September 2014 the differential between the “yes” and “no” camps in-creased slightly to +21% and may indicate

PHO

TOPI

N

location Operator plans

Belcoo near Enniskillen in Fermanagh, Northern Ireland Tamboran Resources Exploration well

Crawberry Hill in Yorkshire, England Rathlin Energy Well tests

East Sussex, England Cuadrilla Plans to drill

Glynneath in South Wales UK Methane Drill one shale gas well

Maesteg, Bridgend in South Wales Coastal Oil & Gas Ltd Drill for core samples

Maesteg, Bridgend in South Wales UK Methane Drill one shale gas well

Preston New Road near Little Plumpton in Lancashire, England Cuadrilla Well tests

South Sussex, England IGAS Plans to drill

West Newton in Yorkshire, England Rathlin Energy Well tests

West Sussex, England Celtique Energie/Magellan Plans to drill

w h e r e S h a l e t h e y d r i l l wOrK plaNS

SOURCE: BBC 2014, DECC 2014, THE TElEGRAPH 2014, WAlES ON lINE 2014


that the Balcombe effect has bottomed out, the researchers noted.

Adding a significant financial induce-ment such as INEOS’s recent announce-ment of a £2.5 billion shale gas giveaway might win greater public acceptance. “This is a game changer for Britain’s shale gas industry. Giving 6% of revenues to those living above Britain’s shale gas

developments means the rewards will be fairly shared,” said Jim Radcliffe, INEOS’s Chairman in September 2014.

NEWCOMERS BOOST POTENTIALINEOS is one of the new companies that have signed up to test the UK’s potential for shale gas, potentially creating a snowball effect of more operators jumping on the exploration bandwagon and, possibly later, pro-duction.

Apart from INEOS, these compa-nies include one of the world’s super majors, Total, and the French power generator and energy trader GDF Suez, both of which farmed-in into existing license blocks earlier in 2014.

INEOS claims they are committed to British shale. “We have established

INEOS Upstream, where we have operational, commercial and techni-cal support from Dan Steward, Kent Bowker and Nick Steinberger, who were the senior team at Mitchell En-ergy in the Barnett Shale and who pioneered the geological and petro-leum engineering as well as fracture stimulation work that achieved the

successful commercial production of sas from the Barnett,” Ms. Brandstaet-ter said.

Ms. Brandstaetter adds that the company is keen to move forward with mergers and acquisitions, and licence applications. INEOS com-pleted one deal in August 2014, which is the purchase of 51% of the shale section in the PEDL 133 license block in Midland Valley in Scotland from BG Group.

Earlier in 2014, Total announced plans to invest at least $21m (£12.7m) in the UK shale gas industry. Total has already agreed with UK energy firm IGas Energy to buy a 40% share in two shale gas exploration licences in Lincolnshire.

In addition, in October 2013,

France’s GDF Suez delivered a major vote of confidence in the nascent industry by buying a 25% stake in 13 UK exploration licences owned by Australian independent Dart Energy, holder of one of the largest acreage positions in Britain.

Following the deal, John McGold-rick, Dart chief executive, told Bloomberg that “the level of interest in UK unconventional gas is growing almost daily.”

LICENSING ROUNDIn order to boost onshore drilling for oil and gas, including gas from shales, the UK government launched on 28 July 2014 the 14th onshore licensing round for a large swathe of England and Scotland including the Bowland Shale in the north of England and the Midland Valley in Scotland, two shale gas plays seen as promising in Britain (see p. 34).

The licensing round closed on October 28, but, according to Nick Grealy, a shale gas advocate, the new picture of interest - if any - in British shale gas is not seen arriving any time soon.

“The government may announce some general figures about December but the full information won’t be there until early 2015,” Mr. Grealy said.

That said, both leaders in explora-tion Cuadrilla as well as newcomers from INEOS have confirmed that they have their eyes set on applying for new acreage. “At the moment it is more or less likely that we will apply for licenses in the 14th round,” Ms. Brandstaetter said in early October.

“We are carefully assessing the ex-ploration acreage included in the 14th round, whilst maintaining our im-mediate focus on securing planning consents for our proposed shale gas exploration sites in Lancashire,” said Mr. Houldsworth.

UK

fo

cU

s

“The level of interest in UK unconventional gas is growing almost daily”

John McGoldrick, Dart Energy, for Bloomberg

poll: Should Shale gaS exTracTIoN IN The uk be alloWed?

0

10

20

30

40

50

60

Jan 12 Mar 13 Jul 13 Sep 13 Jan 14 May 14 Sep 14

Yes

No

Don’t know

Ukraine

OtherEU28

Italy

France

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� the public has consistently favored drilling for shale gas over the last three yearsin the UK

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30 | Shale Ga S Inve S tm ent GuIde | WINTER 2014

Permitting for shale exploration in the UK is a multi-step process involving national government and local councils. There’s what it takes.

B y N i l i m a C h o u d h u r y i N l o N d o N

Fit for Purpose?l i C E N S i N G & P E r m i T T i N G

Over the last 30 years, more than 2,000 wells have been drilled onshore in the UK, although only

around 200 have been hydraulically fractured.

In 2013, the British Geological Sur-vey (BGS) in association with the government’s Department of Energy and Climate Change (DECC) esti-mated that there may be up to 2,281 trillion cubic feet of shale gas in one major basin, Bowland-Hodder, alone.

With the possibility of gaining access to such significant reserves and the financial returns that could be achieved from this, the government is streamlining its policies to meet the need for energy security and to move towards a low carbon economy with natural gas as a transition fuel on the road to renewable energy.

Still, the complexities and compli-cations of the UK regulatory system persist and are one of the elements behind the fact that the UK’s massive potential has not yet translated into a drilling frenzy.

“What we’ve seen before is small players that take bigger risks that go

and look for the stuff and then find it, develop it and look to sell out to the big players. The first really big player to enter by itself, which is very interesting, is a chemical company called INEOS,” said Dan Lewis, senior advisor on infrastructure policy at the Institute of Directors, an industry association.

LICENSES AND PERMITSFour major agencies are involved in regulating the oil and gas industry: the government’s Department of Energy and Climate Change (DECC), local councils represented by the Mineral Planning Authorities (MPA), the En-vironment Agency, an executive non-departmental public body, and the UK’s national independent watchdog, the Health and Safety Executive (HSE).

To complicate matters, the licence and permit process is not uniform throughout the UK, with many dif-ferences between England, Scotland and Wales.

In England the onshore oil and gas industry body, UK Onshore Operators Group (UKOOG), requires companies

to engage with local residents and other stakeholders before each of the three stages of operation and prior to submitting a planning application.

Operators will need to apply for a petroleum exploration and develop-ment licence from DECC, after which they will need to carry out an Envi-ronmental Risk Assessment.

At this stage, the UKOOG has com-mitted to providing £100,000 in com-munity benefits, per well-site, where fracking takes place.

Then operators are required to no-tify the Environment Agency and HSE of their intention to drill a wellhole and detail how they intend to protect water resources.

Land use planning permission is required from the Local Minerals Planning Authority, which can be a county council, for surface operations like the construction and operation of individual well-pads.

An Environmental Impact Assess-ment is then submitted to the MPA, which decides on the application fol-lowing talks with the statutory con-sultees and the local community and


Fit for Purpose?

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imposes any planning conditions. Following the completion of the En-

vironmental Impact Assessment, an operator also needs to apply for envi-ronmental permits, which includes the

management and disposal of waste from drilling the borehole, mining waste and a permit for naturally occurring radio-active material for managing flow-back fluid and waste gases, issued by the Environmental Agency.

In order for DECC to then provide

final consent, operators will need to review available information on fault lines and monitor seismicity, conduct real time seismic monitoring during operations, submit a hydraulic stimula-

tion plan and monitor the growth in height of the fracture away from the borehole.

At production, the UKOOG requires companies to pay 1% of revenues to the local community. This could easily run into tens of thousands of pounds.

TIMESCALEMr. Lewis believes the UK will start to see the number of well pads dramati-cally increase within the next couple of years. “There’s quite a lot of political agreement behind the need to do this” (see p. 32).

However, he argues that where po-litical parties disagree is perhaps in terms of how quickly companies go from completing paperwork to production.

“What we have is a tiny system much more geared to big companies with big pockets and longer time horizons [but] currently between getting an explora-tion licence and getting gas to market you’re looking at a time lag of 6-8 years and what you want is four years or less,” said Mr. Lewis.

Of more immediate concern, accord-ing to Professor John Loughhead, Executive Director at the UK Energy Research Centre (UKERC), is the small number of onshore drilling rigs available in the UK, as opposed to thousands in the US.

“I do not believe there is a struc-tural problem with the system which means that inherent barriers exist due to regulatory or licensing require-ments,” said Professor Loughhead.

He does note however that as explo-ration is yet to be undertaken, the industry remains in the dark about how much gas is actually retrievable, and even how much the supply chain can handle.

“So the review of regulations and licensing is intended to ensure the system is fit for purpose – ensure the right reviews are undertaken that will provide the robust social, environ-mental and safety assurances needed, but to do so in an efficient way that does not create unnecessary barriers, i.e. those that provide no benefit to any involved party,” said Professor Loughhead.

“Currently between getting an exploration licence and getting gas to market you’re

looking at a time lag of 6-8 years and what you want is four years or less”

Dan Lewis, Institute of Directors

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| Shale Ga S Inve S tm ent GuIde | winter 201432

You have been doing most of your fracking in Poland to date, but with Polish shale gas dynamics

going somewhat flat, is the UK now what you’re thinking more about?We have a business development posi-tion in the UK. We don’t do any ser-vices yet but we will be staging seismic services probably by January. We’re talking to four companies that have licenses in the UK and also to several others that are trying to acquire li-censes in the new licensing round.

What is the sentiment about shale gas in the British shale gas sector? Is the UK the new Poland now?There’s quite a bit of enthusiasm. The UK is more advanced in trying to pro-pel forward on shale gas. I’m still opti-mistic that we will have commercial shale gas in Poland, but there’s going to be a long delay because of the pipeline situation, as midstream does not exist in Poland. If you don’t have a pipeline close to your well, it’s a 3-4 year ordeal to get the well tied in. And that’s going to slow down production.

Does the UK have all that then?It does. Plus it’s a much easier process to tie a well in. The UK has a great in-

frastructure for household gas, more so than in Poland. There’s a lot more tie-in lines, most of the well pads will have pipelines within 20-30 feet, or 10 me-ters. The UK will get to production much, much faster than Poland.

Is it just developed midstream that gets UK operators and yourself ex-cited about UK shale gas?It’s no secret that when Cuadrilla drilled their first shale well almost four years ago, it would appear to have commer-

cial potential. There was a potential commercial gas flow from their well. They never announced production numbers, because the stimulation caused a small earthquake due to prox-imity of an active fault and things got stalled since then and it’s only now that everybody’s in a great rush again, with the government passing laws to im-prove the permitting situation, getting

new players in through the licensing round and so on.

Poland’s shale geology didn’t pan out to be so terrific. As a CEO of an oil-field services company, what can you infer about the UK geology?The Bowland shale has good TOCs, good permeability and other key pa-rameters. I think the way that commer-ciality will happen in the Bowland is much like it did in the Barnett [a major shale gas play in the US], where we had multiple shale layers separated by lime-stone and sandstone. The way you will drill in the UK, then, is that you will lay multiple laterals from the same well bore, so instead of 8 to 12 wells on a pad, you can multiply that times 4-5 so you’d get 32-40 wells to a pad. That’s an advantage from the standpoint of den-sity of well sites and well costs.

Would you expect that there will be a lot of interest in the 14th licensing round from UK and international players?For sure. Even the independents that are active already or the ones getting ready to go in are very well funded. There’s going to be a conscious effort to get in quickly.

i n t e r V i e w

Dennis McKee, founder and CEO of United Oilfied Services, is setting his sights on the UK market, where he thinks he can capitalize on Britain’s expected boom in demand for onshore services.

I n t e r v I e w b y w o j c I e c h K o ś ć

UK, the New Poland

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“The UK will get to production much, much faster than

Poland”


Reservoir Intelligence is nutech’s life cycle strategy that helps op-erators and investors to value,

manage and act upon the reservoir.

UK BASIN WIDE STUDY nutech’s uK onshore Shale play Study commenced with a large and challenging exercise in data gathering. nutech joined with the department of energy and climate change (decc) to become a data release agent for the uK onshore, enabling the acquisition of digital well log data and all relevant documentation such as drilling and geological reports, for thorough examination in preparation for the study.

the uK onshore Shale play study was divided geographically into seven main basins (Figure 1) across mainland Britain: wessex, weald, west lancashire, cheshire, east midlands, north east eng-

land province and midland valley, with a total of 381 individual wells analysed.

core and cuttings samples were ob-tained from the British Geological Survey and analysed by the nutech laboratory, poRolaBS, in order to measure total organic content (toc) and carry out mercury Injection capillary pressure (mIcp) tests, X-Ray diffraction (XRd) and Source Rock analysis (SRa). these mea-surements provide calibration points in the petrophysical evaluation of the wells and support a better understanding of the kerogen characteristics.

an advanced petrophysical process (Figure 2), using textural analysis models suitable for source rock environments was applied to evaluate the reservoir characteristics and geomechanical prop-erties (brittleness and competency) of each individual well in order to estimate the hydrocarbon in place and reservoir potential. particular skill and detailed quality control was required in working with old vintage logs.

next, correlation cross-sections and attribute maps, drawn across the seven basins, provide a view of the reservoir continuity, reservoir thickness (iso-pachs), clay volume, average porosity and permeability. most importantly, the study helps to identify hydrocarbons in place, resulting in the identification of forma-tion sweet-spots.

INSIghT AVAILABLE with this study, which is now available, nutech better equips operators and service companies with knowledge of the geological, depositional, structural, pet-rophysical and geomechanical nature of the uK unconventional reservoirs and

formations. overall, holders of the study will be better placed to make wise deci-sions in the investment and development of these resources in order to achieve success by drilling fewer wells.

By C H r i S H u g H e S a n d St ua rt L a rg e

Reservoir Intelligence works to combine staff experience and expertise with proprietary technology to provide integrated solutions at all stages of a reservoir’s lifecycle.

UK Unconventional Shale Play Study

1. CoNVENTIoNAL DATAnutech begins the nulook analysis using conventional log data such as Gamma Ray (GR), Spontaneous potential (Sp), resistivity, neutron porosity, density porosity and sonic porosity or a subset of these.

2. VoLUmE ShALE volume of shale (vsh) is calculated from multiple shale indicators.

3. TExTUrAL moDELnuSpec track displays the pore size distribution from clay sized to large pores derived from the textural model.

IrrEDUCIBLE WATErIrreducible water (BvI) is modeled using relationships derived from nuclear magnetic Resonance output responses and nutech’s multiple modeling logic (mml) produced from conventional log data responses.

4. ToTAL orgANIC CArBoNKerogen Fraction is determined using multivariable logic corrections for Kerogen effect on density, neutron, sonic, and pe.

5. VoLUmE CLAYnutech utilizes the new input of BvI to quantify the amount of mechanically bound water contained in the matrix as well as the amount of silt contained in the shale volume.

6. LIThoLogYthe Kerogen corrected data is used in multimineral model to solve for Silica, lime, and heavy minerals to determine porosity.

7. BULK VoLUmEwater Saturation, bulk volume water are determined using nutech’s proprietary multimodeling logic.

8. PErmEABILITYpermeability is determinded using an algorithm calibrated to core data and production matching.

9. FLAgSnutech’s grading system indicates the risk rating applied to each zone. the number of flags increases as the quality and calculated productivity of each identified zone increases. at least three flags are needed to indicate if a zone qualifies in the net pay.

10. ADSorBED AND FrEE gAS VoLUmESadsorbed and Free Gas volumes are determined from core calibrated data langmuir Isotherms.

nuLOOK SHaLe anaLySiS

MIDLANDVALLEY BASIN

NE ENGLAND PROVINCE

WEST LANCASHIREBASIN

EAST MIDLANDSPROVINCE

WORCESTERGRABEN

CHESHIREBASIN

WESSEX/ WEALDPROVINCE

uK OnSHOre BaSinS in Study

SOURCE: NUTECH

a d V e r t O r i a L

Stuart large, Senior account manager, and co-author of the article, can tell you more about the uK unconventional shale play study at [email protected].


The UK governmenT, which is keen to find domestic supply to replace dwindling North Sea pro-

duction and offset rising imports, launched a 14th onshore licensing round earlier this year, primarily to boost shale gas exploration efforts. The results of the round, for which applica-tions were due by the end of October, will give an indication of the strength of interest in the shale gas sector beyond the pioneering minnows who dominate it at present.

“I’m sure this round of onshore li-censing will see some new players com-ing in,” said Ann-Marie Wilkinson, head of communications at IGas En-ergy, one of the leading players in the UK shale gas sector.

IGas, which will put in bids in the cur-rent licensing round with undisclosed

partners, is part of a consortium that has already agreed a deal with Total under which the French company will take a 40% interest in two shale gas exploration licences in central England, potentially investing up to $50 million. The agree-ment made Total the biggest oil and gas firm to invest in UK shale gas so far.

Another French firm, GDF Suez, has also agreed to invest in exploration for shale gas and coalbed methane with Australian firm Dart Energy. Dart was the target of a takeover bid by IGas, which went through in October to create the country’s largest shale gas firm in terms of acreage.

Much of the acreage covered by the GDF Suez/Dart agreement lies in northern England, which is considered to be one of the most promising early exploration targets.

SUPPORT CAN GROWReserve estimates by the British Geo-logical Survey for the Bowland shale formation of northwest England centre on a figure of around 1,300 trillion cubic feet of shale gas for that play alone, though there is little prospect of extract-ing anything like all of that. However, the industry is keen to point out that even if 10% of that amount could be produced, it would be enough to meet current UK demand for 50 years.

Despite the geological potential and strong backing for shale gas exploration from the Conservative government, doubts remain that large-scale invest-ment and know how from the industry’s big guns are about to flood in under the on-going licensing round or any time soon, given the opposition to hydraulic fracturing – or fracking – used in shale

U K ’ s L i c e n s i n g r o U n d

The UK’s fledgling drive to exploit its shale gas reserves has already become mired in controversy, raising the prospect that drilling programmes could be delayed for years by protests and red tape. With all the main political parties in favour of at least limited exploration, energy companies remain hopeful that the industry could move into a higher gear in the near future.

B y I a n L e w I s I n L o n d o n

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gas exploration and production. “The government has tried to set a

favourable set of fiscal terms and it is offering inducements to local commu-nities to accept development. But it is doing very little else to manage the incredible opposition to fracking. While that opposition remains, it is very dif-ficult to see any way forward,” said Professor Paul Stevens, a distinguished fellow at Chatham House, who has writ-ten reports on shale gas prospects for the London-based think tank.

A tracking survey published by the UK Department of Energy and Climate Change (DECC) in August showed public support for shale gas extraction standing at just 24%, compared to 29% three months earlier. Despite this, with 47% of that survey sample still unde-cided on the benefits of fracking, the industry argues that support could eas-ily grow, given the right circumstances.

We need to make shale gas explora-tion happen in a way that brings the public with us,” said IGas’ Wilkinson. “As a business we are very pro renew-ables, but the reality is that we need gas to complement it in the short-to-me-dium term,” she said.

However, Professor Stevens says that big energy firms, many of which have high profile stakes in other parts of the UK economy, will be wary of suffering reputational damage by becoming as-sociated with potentially unpopular shale developments that could be de-layed by high-profile, long-running court cases. The UK’s still ill-defined local and national legal frameworks for onshore shale drilling and tough envi-ronmental laws are unlikely to result in a speedy legal process.

DRIVING ITThe absence of major players does not necessarily preclude shale gas develop-ment – it certainly didn’t in the US, where it was the smaller companies that made all the early running, even with considerably less gas transportation infrastructure in place than would be the case in much of the UK.

The company most likely to kick start exploration in the Bowland shale is Cuadrilla Resources, which is planning to drill a series of wells there in coming months. Cuadrilla and others in the

sector are currently only allowed to carry out seismic tests and drill vertical exploration wells. They are not yet al-lowed to carry out fracking or flow tests.

It was a well fracked by Cuadrilla near Blackpool in the Bowland shale in 2011 that triggered an upsurge in pub-lic opposition to shale gas drilling, after it triggered minor earthquakes.

More recently, the postponement of Cuadrilla’s efforts to drill a vertical onshore oil well at Balcombe in Sussex, southern England on 2013 in the face of strong local protests reflected the potential for opposition to any drilling in rural areas, even when fracking is not involved. Meanwhile, in September 2014, an application by Celtique Ener-gie to drill within the South Downs National Park on England’s southern coast was turned down by the park’s governing authority.

The industry realises it needs to work hard, if it is to convince UK residents that fracking is safe and that it can bring

substantial economic benefits. As part of that effort, a report produced by EY for industry body UK Onshore Oil and Gas (UKOOG) earlier this year pro-duced some headline-grabbing figures. According to Getting ready for UK shale gas, a report from consultancy EY, UK shale gas development could attract some £33 billion of investment across the supply chain over 18 years and cre-ate around 64,000 jobs.

“With such benefits on offer, if explor-ers are allowed to increase exploration and they can obtain good flow rates from wells, then it should be much easier to obtain investment and gain public support. But we just don’t know what those flow rates are going to be yet,” said Corin Taylor, a senior adviser at UKOOG.

Associate Paul Gunn from interna-tional corporate law firm Eversheds adds that this round of onshore licens-ing will help improve the public image of operators, offering them a platform to demonstrate compliance with a regulatory system that is better tailored to their specific operations.

“It will be interesting to see what the appetite for new licenses has been fol-lowing the deadline for applications and the expected award of licences by DECC within the next 12 to 18 months,” said Mr. Gunn.

A ray of light for the industry was the announcement in August 2014 by INEOS, the owner of the Grangemouth petrochemicals plant on Scotland’s east coast, that it had acquired a 51% stake in a 329 sq km shale gas licence adjacent to its plant. Given the Grangemouth facility provides a ready market close at hand for any gas that is discovered, this could be readily converted into a com-mercially viable resource, potentially giving momentum to the sector.

Additional reporting by Nilima Choudhury.

UK

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“If explorers are allowed to increase exploration and they can obtain good flow

rates, it should be much easier to obtain investment and gain public support”

Corin Taylor, UKOOG

Existing Onshore licences

Area Under Consideration

Current shale gas licences

UK’s Licensing geography

� Much of Britain could be subject to bids, but full details are set to emerge in 2015


www.lmkr.com/geographix

®FIRST geology interpretation software on Windows

FIRST to incorporate workflows for unconventional plays

FIRST for seismic-inclusive geosteering

FIRST choice of shale operators

Realizing Your Unconventional Potential For 30 Years

®GeoGraphix is a registered trademark of Landmark Graphics Corporation. The LMKR Logo is a trademark of LMKR Holdings. Windows is a registered trademark of Microsoft Corporation. ®LMKR Holdings is the exclusive world-wide licensor and distributor of GeoGraphix software. All other company and product names are trademarks of their respective owners.

DiscoverYourPotential

Make this well better

than your last through

integrated

multi-dimensional

geological interpretation

Maximize your reservoir

understanding through

seamless interpretation

of seismic and

geological data

See where your next

BIG opportunity lies with

state of the art mapping

& 3D visualization

Optimize your field

development efficiency

with quick and

easy field planning

tools

GeophysicsField

Planning VisualizationGeology

For more information contact: [email protected] | +44 7875 699 695 (UK)

Extracting shalE gas in the UK is estimated to be three times more expensive than in the US. Ac-

cording to market research company Navigant Consulting and the UK’s De-partment for Energy and Climate Change, in 2010, break even prices in Germany and Poland, were in the range of $12.3-13 per mmbtu. This compares to a break-even price of $4.25/mmbtu in the US.

Shale gas operator Cuadrilla Resources estimates that a single test well operation in the UK in 2011 costs about £10.5 mil-lion (€13.4 million).

Once a well is drilled, it is fractured to release the gas: fluid is pumped into the well at high pressure in order to fracture the shale rock. A propping agent, like frac sand from silica sand, is used to keep fractures open. But raw materials like frac sand are yet to be produced in the UK.

According to the British Geological Survey (BGS), there are currently 39 quar-ries in the UK which in 2012 produced almost 4 million tonnes of silica sand. To qualify as frack sand to be used to frac shale deposits, silica sand must contain 99% or more quartz, and be of a particu-lar size, sphericity, crush resistance and turbidity (a measure of water clarity). Instead of sand, ceramic proppant may be used as well.

Professional services firm Ernst & Young estimates there could be a total spend of £20.5 billion (€26.15) through demand for specialized equipment and services, key materials and skills in the raw materials sector.

Furthermore, the experience from production in the US is that each well would require in order of 2,000 to 10,000

tonnes of frac sand depending on the length of the well and the number of hydraulic fracturing treatments required.

Speaking to the Shale Gas Investment Guide, the BGS’ industrial minerals spe-cialist, Clive Mitchell, said that the re-sources to efficiently frack for shale gas do exist in the UK, but given that shale gas production is yet to gain momentum, it is unclear how much will be needed.

SUPPLY CHAIN DIFFICULTIESThe BGS suggests there may be as much 1,300 trillion cubic feet (tcf) of shale gas present in the north of England alone, which compares to total UK annual gas consumption of around three tcf.

“I think the UK has the resources and the production capability to meet the demand for frac sand,” said Mr. Mitchell. “It is very likely that the major silica sand producers in the UK are actively consid-ering if they could produce frac sand from their existing operations.”

Companies that Mr. Mitchell refers to include Aggregate Industries, Hanson Aggregates, Lafarge Tarmac and Sibelco.

Additionally, E&Y suggests that in or-der to build a successful supply chain, industry association, UK Onshore Op-erators Group, with the support of gov-ernment and supply chain companies,

should build an investment for developing UK-based capabilities.

“This should include recommendations for bridging finance options to allow the supply chain to invest early enough to deliver on time,” said EY.

INVESTOR CONFIDENCEIf the UK plans to deliver 400 lateral wells per year at its peak, as estimated by in-dustry advisory body, Institute of Direc-tors, raw materials will need to be manu-factured domestically if costs are to be kept to a minimum.

But according to Paul Stevens, Energy, Environment and Resources research department at international think tank, Chatham House, only a handful of service companies are currently involved in shale gas operations in the UK.

“This [a successful raw materials supply chain] needs policies to get more service companies such as offering a more attrac-tive tax regime by altering capital allow-ances and depreciation,” he said.

To boost investor confidence, the in-dustry is currently working closely with the government’s Department of Business, Innovation & Skills to identify the poten-tial for growing a UK supply chain to reduce the high cost already tainting the UK shale gas industry.

A seeming lack of domestically produced raw materials required for fracking is adding to the cost and operational puzzle that shale gas exploration and production currently is in the UK.

By N i l i m a C h o u d h u r y i N lo N d o N

Building Sand Capacity

F r a C k i N g ’ s m a t e r i a l C h a l l e N g e

“It is very likely that major silica sand producers in the UK are considering if they

could produce frac sand from their existing operations”

Clive Mitchell, BGS.


www.lmkr.com/geographix

®FIRST geology interpretation software on Windows

FIRST to incorporate workflows for unconventional plays

FIRST for seismic-inclusive geosteering

FIRST choice of shale operators

Realizing Your Unconventional Potential For 30 Years

®GeoGraphix is a registered trademark of Landmark Graphics Corporation. The LMKR Logo is a trademark of LMKR Holdings. Windows is a registered trademark of Microsoft Corporation. ®LMKR Holdings is the exclusive world-wide licensor and distributor of GeoGraphix software. All other company and product names are trademarks of their respective owners.

DiscoverYourPotential

Make this well better

than your last through

integrated

multi-dimensional

geological interpretation

Maximize your reservoir

understanding through

seamless interpretation

of seismic and

geological data

See where your next

BIG opportunity lies with

state of the art mapping

& 3D visualization

Optimize your field

development efficiency

with quick and

easy field planning

tools

GeophysicsField

Planning VisualizationGeology

For more information contact: [email protected] | +44 7875 699 695 (UK)


Cuadrilla resourCes plans to drill up to eight horizontal wells split between two pads on its acre-

age in Lancashire, northwest England, in one of the most geologically promis-ing areas of the Bowland shale play, which lies across the Pennine Basin that stretches across northern England.

Optimism over the Bowland’s po-tential has been driven, to an extent, by some similarities between its car-boniferous geology and spectacularly productive US shale plays, such as the Barnett play in Texas. Data extrapo-lated from US drilling has augmented geological surveys and the results of what limited shale drilling there has been in the UK to produce some at-tractive figures for those keen to pro-mote the potential of UK shale gas exploration.

A 2013 study by the British Geologi-cal Survey (BGS) provided a central estimate of 1,300 trillion cubic feet (tcf) of shale gas in place across the play – if just 10% of that could be recovered, it would be enough to meet UK gas con-sumption at the current level for around five decades. Cuadrilla has estimated its acreage in Lancashire, which covers just under 1,200 sq km, could alone hold some 200 tcf of gas in place.

DEPTH AND BRITTLENESS“Shale needs to be at the right depth, have the right maturity, and, very impor-tantly, the right brittleness. It needs to be naturally fractured to a degree and then have the qualities to enable it to be frac-tured properly when you do your stimu-lation using hydraulic fracturing. In broad terms, this all applies to most of the Bowland shale,” said Huw Clarke, an exploration geologist at Cuadrilla.

Explorers also gain confidence from the already established track record of the Bowland shale for hydrocarbons production – commercial quantities of conventional gas have been produced in the south of the play, in England’s East Midlands region, while conventional gas fields in the eastern Irish Sea also share the same source rock.

Cuadrilla is also keen to draw attention to another aspect of its acreage in Lan-

cashire – the thickness of the shale for-mation. Whereas US formations, such as the Marcellus or Barnett shales, may typically be around 300-400 ft (100 m ) thick, the Bowland shale is generally much thicker. In Cuadrilla’s acreage, the shale formation is around 3,000-4,000 ft (approx. 1,000 m)thick, so drillers can access more shale layers from individu-al drilling sites.

This factor is not just important be-cause it could improve drilling econom-ics. In the UK, and Europe in general, population densities tend to be higher than those in some of the most prolific US shale plays. Liverpool, Manchester, Leeds, York and Sheffield are among the cities located within some of the most prospective areas of the Bowland shale play. Meanwhile drilling rights are likely to be hard to get on environmental grounds in many rural areas within the

U K ’ s s h a l e r o c K

Geologists believe thick shale formations under northern England hold enough gas to meet domestic demand for decades, but a lack of hard data on flow rates means no one is certain how easy it will be to extract. Now the industry is poised to find out.

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Fears and Forecasts sh

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Bowland shale area, which includes several National Parks. The ability to access more gas from fewer drilling pads on the surface is a valuable asset.

EARTHQUAKE FEARSExplorers also have to show that they meet stringent conditions below ground, as well as on the surface. Minor earth tremors linked to an early attempt by Cuadrilla to drill at its Preese Hall site in Lancashire in 2011 bolstered op-position to hydraulic fracturing (frack-ing) and prompted the UK government to impose a moratorium on its use,

while further studies were made. This was lifted in December 2012, on the condition that the industry introduced new controls to reduce seismic risk.

In response, Cuadrilla used the results of a high-resolution 3D seismic survey to identify potentially hazardous faults within the rock in its licence areas, which it says it will avoid when drilling. The company also says it will reduce the amount of fracturing fluids it uses per stage to force gas to flow from the source rock, as the size of earth tremors is pro-portional to the amount of fluid used.

Mr. Clarke also says the company will use a highly sensitive micro-seismic monitoring system, which enables the

detection of tremors so small they would not be felt by people on the surface.

“This will allow us to detect any seismic events that could escalate. If these happen anywhere near a fault we would halt our fracturing operation,” Mr. Clarke said.

Shale drillers also need to take mea-sures intended to ensure there is a bar-rier between their fracking operations and any drinking water aquifers that may lie above, though it is unlikely they will be able to drill at all below water reserves classified as “principal aquifers” by the UK’s Environment Agency.

Cuadrilla’s shale acreage is beneath a

saline aquifer, not used to source potable water, but the company must still meet tough conditions on well construction and use of fracking fluids, which aim to ensure water supply cannot be con-taminated via that route.

CAUTIoUS FoRECASTSGeological surveys, seismic data collec-tion and comparisons with US shale plays highlight the potential of the Bow-land shale, but without hard data based on flow testing, geologists remain very cautious about whether that potential can be realised.

The BGS’ central estimate of 1,300 tcf of gas in place under the Bowland shale

lies in the middle of a broad spread – the low-end estimate is 822 tcf, while the high end estimate is 2,281 tcf.

“We wouldn’t want to give people false expectations one way or the other, so a broad estimate is appropri-ate,” said Ed Hough, coordinator of shale gas research at BGS.

Just how much of this gas in place can be produced is also hard to predict. The 10% recovery rate sometimes used il-lustratively by the industry is at the more conservative end of the scale based on experience in the US, where recovery rates from gas in place are typically in the 8% to 29% range.

However, BGS stresses it just does not have enough information to provide accurate figures for producible gas re-serves at this stage, while recovery rates, whatever they turn out to be, are only going to be relevant in the areas where companies are actually able to drill.

“It is also worth remembering that some geographical areas and some horizons in the Bowland will be more gas prone than others, so any talk of a 10% recovery factor has to be treated with a huge amount of caution,” said Mr. Hough.

However, these are early days in UK shale gas exploration, so companies will be hoping that new shale plays will be identified, boosting the overall resource.

A BGS study released earlier this year threw a focus on the potential of the Midland Valley of Scotland, an-other carboniferous shale structure, where the central estimate for gas in place is put at of 80.3 trillion cf.

Another area identified as a promis-ing shale target, based on detailed study, is the Weald region of southern England, though this is thought to be predominantly a shale oil, rather than gas, play. Other areas are also thought to have shale gas potential, but have so far been studied in less detail.

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“Shale needs to be at the right depth, have the right maturity, and the right brittleness. In broad terms, this

all applies to most of the Bowland shale” Huw Clarke, exploration geologist at Cuadrilla.

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Driving itTop executives of Hutton Energy, Charles Morgan and David Messina, are exemplary of the UK’s still early stages of shale gas development. Once and if UK shale gas happens it will be because of independents like Hutton.

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A US-Style shale revolution is indeed going to be difficult to rep-licate in the UK. The geology, the

regulations, the controversy - it’s all there to hinder development to a scale unseen in the US. Except for one thing: just like in the US, it is independents that are driving it now and look set to drive it in the future, once - if - the riches of the Bowland shale are proven.

Hutton Energy is one such company. It has been dabbling in Polish shale, but Poland is no longer the European shale gas revolution’s poster child. The UK is, and Hutton has already positioned itself on the UK’s still fledgling market. It’s a game of high stakes and a potentially enormous reward, says Charles Morgan, Hutton’s Chairman.

Born in the UK, raised in Australia, and based in the UK now, Mr. Morgan is a convert from the financial sector to oil and gas. “I worked in the financial world for a number of years but really wanted to be a principal not an agent

and ended up in the oil and gas business over 20 years ago and fell in love with it,” he said.

Now, with the unconventional revo-lution happening in front of his eyes, they hope to capitalize on it.

“Shale plays are a highly capital in-tensive business and at the stage where the plays are more proven and the risk reduced we would look to attract a part-ner as our business model is to partici-pate at the high-risk stage and get value uplift,” said Mr. Morgan.

“As has been shown in the USA even Chesapeake has farmed out to Statoil in the Marcellus,” he added.

For Hutton’s ambitions to come true, however, the company needs to attain two more immediate goals. The first is to roll out an exploration program on the acreage the company acquired from another oil and gas independent, New-ton Energy UK, in a deal announced in July 2014. Following the deal, Hutton has an acreage position of 111,000 acres

in the East Midlands containing both conventional and Bowland shale plays.

“The Bowland is a very interesting play. There’s no doubt it’s thick and has good TOC levels. In reality, though, we don’t know what commercial potential it holds, as only a handful of wells have been drilled in the basin,” said David Messina, Hutton’s managing director.

The Bowland is bit like Poland back in 2009, Mr. Messina goes on, but there’s one important difference.

“There was that early excitement about how much gas Polish shales would hold but there was no understanding for how much gas could be extracted and whether it’s going to be economic to produce,” Mr. Messina said.


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“While these questions remain un-answered in the Bowland, we’re likely to know answers faster than Poland. The Bowland extends from the East to the West Midlands over less than 200 kilo-meters. It’s a relatively small geographic area, so early drilling will be denser and we will know more and faster than in the case of the Polish shale which ex-tends over three times the same area,” Mr. Messina said.

The second strategic endeavor on which the company’s success hinges is whether it will emerge a successful bidder for still more acreage in the so-called 14th licensing round. The gov-ernment-organized round closed in late October and Hutton – as well a

host of other companies – will know in early 2015 if they bid successfully.

According to Mr. Messina, the li-censing round will be the litmus test for interest in the UK shale gas. Mr. Messina has seen a lot happen in the energy sector, with his portfolio includ-ing work in the renewable energy sec-tor before co-founding Hutton Energy with Mr. Morgan, Frank Maio and Craig Burton in 2009. Macquarie Bank joined the Hutton shareholder table in 2010 and has continued to support the business into its UK expansion.

But he seems to suggest that who-ever judges the licensing round’s suc-cess by the number of big players coming in is wrong.

“I think there’s been interest in [the licensing round] but it’s coming mostly from within Europe, from independent companies. In general the larger companies will wait until acreage is consolidated or derisked,” Mr. Messina said.

“Investors’ appetites will be driven by what chance they think a project has of success in combination with the potential upside. Investors’ experience in Poland has not so far been very encouraging. I think that this is being somewhat reflected in the modest in-terest in UK shale companies, despite an initial flurry when Total and GDF Suez farmed into UK shale acreage,” said Mr. Morgan.

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“I worked in the financial world for a number of years but really wanted to be a principal not an agent and ended up in the oil and

gas business over 20 years ago and fell in love with it” Charles Morgan, Hutton Energy


There is a gap between what O&G companies say about how reputation is important to them and how they fail to cater to it. Tom Vesey helps bring words and action together.

I N T E R V I E W

According to tom Vesey, founder and CEO of global risk consultancy Risk to Reputation, the

challenges faced by early stage shale operators are complex.

“Everything is new, technical and highly regulated. What tends to happen is that operators focus on what’s of day-to-day importance. Then something unexpected happens and you have a loss of reputation, which has a monumental impact. Most firms will claim reputation is their most valuable asset. The chal-lenge comes from their lack of action to foster and protect it,” Mr. Vesey said.

IT HAPPENED IN BRAZILConsider the example of Chevron’s large offshore operations in Brazil. Management thought if they focused on government, they would have their primary stakeholder onside. “Chevron spent 20 million USD a year supporting the government’s AIDs fund. But these investments were not visible. At the same time, there was a rising sense of nationalism in Brazil and anger toward foreign companies, who were perceived by some as new colonial powers. Then, in November 2011, there was a small spill of about 3000 barrels of oil, which was dealt with quickly and properly, but Chevron’s executives were publicly pilloried, their passports confiscated and they were threatened with jail. Federal prosecutors filed a suit seeking

20 billion USD in damages, eventually settling for much less.

“In my view, Chevron thought they could assure their reputation by helping the government with direct contribu-tions to social programmes. Yet, society as a whole did not see any visible con-tribution. Mr. Vesey said.

“Operators have a tendency toward tunnel vision, focusing on what’s in front of them – what we call the “In-side-Out” perspective of the world. It’s rare that they take the “Outside-In” perspective; the view of the multiple stakeholders on whom the firm relies for its licence to operate. Remember, politicians only care about getting re-elected, so as soon as their constituents turned against Chevron, so did the government,” Mr. Vesey said.

GROW ROOTSOperators need to build deep roots of support and create an ecosystem among their key stakeholders. “That’s what Risk to Reputation (R2R) does for our

clients. At the beginning, we interrogate the company: we explore for corporate vulnerability points; we look at the risks to the firm’s strategy, for example, how will they respond to strong opposition to arctic drilling?” Mr. Vesey said.

“We evaluate the risks of the strategy, for example, how will they respond to a spill in the Arctic? Then we look at a firm’s relations with capital markets. We ask: who do you perceive to be the your most important stakeholders? And we develop what we call listening posts to collect data on emerging risk. The end result is a robust measure of and insights into the Outside-In view of the company, which senior execu-tives can discuss and begin to manage,” Mr. Vesey said.

“We have worked for many of the world’s largest oil and gas firms and here’s what we’ve learned: the license to operate depends on your reputation. And your reputation does not belong to you, but to the wide ecosystem of stake-holders with whom you interact. You

“We have worked for many of the world’s largest oil and gas firms- and here’s what

we’ve learned: the license to operate depends on your reputation”

Tom Vesey, Risk to Reputation

Reputation is Everything

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do not need to be loved by stakeholders, but you do need their permission. Un-fortunately, firms often wake up to this when it is too late,” Mr. Vesey said.

REPUTATION IS MONEYFor many, reputation is a soggy disci-pline, not worthy of serious manage-ment consideration.

“Very few firms can accurately assess the financial impact of reputational fluctuation. This is one of our key strengths. We provide a major contri-bution to enterprise risk management,” said Mr. Vesey.

“One example of our client work was for McDonald’s. At the time, the firm was aware of the public’s concern over obesity linked to their long-standing strategy of targeting children.”

“But they had no reliable basis for evaluating the financial impact of continuing this practice. They had no detailed understanding of their stakeholders’ perspectives. Manage-ment opted for gut instinct and took no action. A reputational crisis ex-ploded, taking McDonald’s by sur-prise. The firm lost fifty percent of its market value in six months and

changed strategy twice before re-focusing on a sustainable new ap-proach,” Mr. Vesey said.

As for applying stakeholder analysis to the oilfield, “I am not sure whether operators like, for example, Cuadrilla Resources, use the techniques we men-tion above, but they certainly seem acutely aware of reputation, of paying attention to their stakeholders and of understanding their stakeholder’s im-pact on their business. Their behaviour seems to imply a firm who understands the “Outside-In” perspective, which is quite unusual in the industry.”

For many, reputation is a soggy discipline

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“We develop what we call listening posts and collect data on reputational risk. The end result is a robust measure of and

insights into the Outside-In view of the company’s position” Tom Vesey, Risk to Reputation


As onshore oil and gas develops in the UK, three professionals are working to make sure shale exploration is done in a manner that’s human safe and environmentally friendly. In a Europe that’s moving toward low carbon energy sources, these ladies are proof there’s still a future for talented oil and gas professionals.

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It’s a warm, fall day, October 27th. The sun is perfect. Standing on a rooftop in central London, Frances

Morris-Jones is radiant at the center of the world.

Over the centuries, Britain has pro-duced many great explorers, who traveled the world to turn over rocks, curious what they might find beneath. Ms. Morris-Jones is one such intrepid explorer.

She worked for BP on an unconven-tional gas strategy, before shale gas had transformed North America, and then for ConocoPhillips, helping the IOC to ex-tend their reach in China, Australia and Poland. Today, she works as a consultant advising UK explorers on their existing acreage and plans to aid new entrants in the 14th license round.

VETERAN EXPLORERUK domestic gas production is mostly offshore. However, the country (see Indi-cators, p. 14) has been importing less and less gas from the North Sea as the reserves there decline. But the future could be dif-ferent. In the same way that America has staked out energy independence by frack-ing tight rocks onshore, Ms. Morris-Jones

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Frances Morris-Jones (at left) is one of three professionals who are working to transform the

UK energy sector. Along with Anna McMaster (centre) of Hutton Energy and Victoria Merton

(right) of Peel Gas & Oil, this trio aims to produce oil and gas, safely, and in a way that

respects the natural environment



believes that shale gas in Britain could play a role in import substitution, albeit on a smaller scale and with greater challenges than in America.

According to Ms. Morris-Jones, “The 14th round raises the possibility of new entrants. It is possible that new entrants will prefer to take positions through merg-ers and acquisitions outside of the round rather than by submitting their own ap-plications: this could suit private equity funding. Already we have seen some larger companies doing joint ventures with minority interests to fund early ex-ploration, such as Centrica, GDF Suez and Total.”

London’s alternative investment market (AIM) has struggled as of late to fund pure oil and gas explorers. London listed ex-plorers are trading on average at 60 per-cent of their net asset value. The market’s pessimism hangs like a brick from the necks of San Leon Energy, Egdon, and IGas, hurting their ability to raise explora-tion equity at favorable terms.

Ms. Morris-Jones would agree with this assessment of the state of affairs. “The oil and gas alternative investment market is

generally undergoing a difficult time, both conventional and unconventional. There was an initial assumption that unconven-tional plays represented a lower risk be-cause of the greater certainty pertaining to the resources-in-place,” she said.

“Now I think there is a growing realiza-tion amongst industry players and finan-cial backers that once resource richness is established, the critical issue is the deliver-ability or produce-ability of the rock as a reservoir, and this takes longer to de-risk in an unconventional play than a conven-tional,” Ms. Morris-Jones said.

Ms. Morris-Jones would know a thing or two about the risk associated with shale gas. She worked for 3Legs Resources, whose principal asset was in the Baltic basin in North Poland. The company quit in September after a four-year drilling campaign, having failed to produce gas at commercial quantities. The public equity markets were a major source of funding for 3Legs, who debuted in London in 2011 and traded at 250 pence per share before falling 80 percent off their peak in less than six months. Today, they trade at less than cash, 18 pence per share.

INTERMEDIARYTo hedge against a prolonged investment period, companies such as The Peel Group have created an integrated, full-service offer for operators.

Talk to Victoria Merton, from Peel Gas & Oil, and she’ll tell you the key is for

Frances Morris-Jones

“I’ve had conversations with

Members of the Parliament from

all Parties and they don’t want to miss

the chance to lock in the economic supply chain benefits for the UK in upstream shale

gas production” Victoria Merton,

Peel Gas & Oil


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operators to engage as early as possible with the community. Consider the case of telecommunications towers or masts, which were earlier regarded by some with suspicion but are now generally accepted by society. In the case of shale gas, if the UK regulatory regime works, and opera-tors reach out, the community could eventually embrace shale wells with the same level of trust as they do telecom-munications infrastructure.

Peel has worked with IGas over the last five years in the northwest, around the city of Manchester, working to-gether to develop sites suitable for shale exploration. The social license to oper-ate - a critical asset - is usually obtained by independent explorers at the initia-tive of internal staff working alongside a public relations firm. Peel Gas & Oil offers those services as part of an inte-grated package.

Ms. Merton: “In 2008, IGas wanted to develop unconventional gas, and Peel as a major landholder and infrastructure group, has a strong track record in site development and public consenting. That’s what Peel Gas & Oil offers: a development partnership providing IGas and companies like them with a

trusted partner.” Peel Holdings is a large company

based in the northwest of the United Kingdom with a land holding of over 33,000 acres. Ms. Merton says that nei-ther Manchester nor Liverpool, a nearby port city, want to lose this vital opportunity.

Ms. Merton says the UK missed the boat in the development of the offshore wind industry. “The Germans and Danes own the offshore wind supply chain even though Britain is building the wind farms. I’ve had conversations with Members of the Parliament from all Parties and they don’t want to miss the chance to lock in the economic sup-ply chain benefits for the UK in up-stream shale gas production.”

“Peel Gas & Oil is a natural partner in the region because of our experience in infrastructure permitting and devel-opment. We see opportunities to utilize the rail and canal systems to ease traffic loading on the streets. Our landholding includes the Manchester ship canal, 33 miles of waterways, and a transport and commodity artery for the northwest.”

Victoria Merton

Anna McMaster


UP AND COMINGHutton Energy is a junior explorer at work in Britain. Led by an executive team with global unconventional experience, Hutton Energy has developed an acreage position across Europe with license blocks in the UK and Poland, and ap-plications pending in France and the Netherlands.

Anna McMaster is the communica-tions director for Hutton Energy. Since 2010, she has helped the London based explorer build a country office that sup-ports their European operations.

“There is a real excitement here sur-rounding the fourteenth licensing round. The government is creating the right framework to support the industry and we believe the UK has significant re-source potential. Yes, Hutton is partici-pating.”

Hutton Energy has changed their strat-egy. Originally aimed at unconventionals, Ms. McMaster’s team has expanded their portfolio in a search for conventional opportunities. Recently Hutton Energy acquired Newton Energy, a Canadian listed junior explorer. The acquisition has given Hutton Energy four onshore li-censes in the UK’s East Midlands cover-ing some 110,000 acres.

Under the watchful eye of geologist Frank Maio, Hutton Energy has cherry picked promising acreage in Europe in the same way Mr. Maio entered the Mar-cellus shale play in Pennsylvania in 2004. Ms. McMaster is the daughter of Frank Maio, to whom she attributes her deci-sion to develop a career in oil and gas.

“I grew up watching my father work through the ups and downs of the indus-try in the eighties and nineties. I can’t say I had much interest in the oil industry as a kid, although it was quite exciting when Dad named an oilfield in Nebraska after me. My interest came much later, when he started working in the Marcellus,” Ms. McMaster said.

Whether Ms. McMaster, Ms. Merton, and Ms. Morris-Jones are part of a new industry emerging in the United King-dom is yet to be decided, but what these professionals have already done for the safe and environmentally friendly devel-opment of oil and gas is considerable.

As for industry’s future beyond the 14th license round, no one can quite say. But on that warm fall day, all is well on that rooftop in central London.


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T h e P h o T o G r a P h e r

Lou Denim is a photographer specialising in celebrity portraiture, beauty and fashion. www.loudenim.com


Private Equity in Short SupplyThe banks are buoyant, so if the appetite for equity to fund exploration risk across Europe comes back, funding gaps should be easier to close.

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A look bAck: in 2012, the un-conventional oil and gas license map of Poland was dotted with house-

hold names. ENI, Talisman, Marathon, Orlen, ExxonMobil, Chevron and ConocoPhillips, as well as San Leon, 3Legs Resources and BNK Petroleum had all begun to drill.

Who was paying for those wells? Among the independents, the drilling campaigns were funded by a combina-tion of private and public equity. George Soros, through hedge fund Quantum Partners, was keen to risk. Others fol-lowed Mr. Soros into the market. Inward private equity investments totaled around USD 250 million between 2010 and 2013.

SNAP BACK TO REALITYFast forward to 2014: BNK discovered the shales are deeper than expected. San Leon has found their frac designs are insufficient even when there’s gas in the formation.

Shareholders who clamored for com-mercial discoveries have given up. Today, the end result is that of the foreign firms - only ConocoPhillips is left drilling in Polish shales.

A look at the financial statements of 3Legs Resources and San Leon Energy, shows major shareholders to include Damille Investments, Weiss Asset Man-agement, BlackRock, Toscafund Asset Management, the Capital Group, Kulc-zyk Investments, along with a host of privately wealthy individuals from Den-mark, Norway, France and the United States. But will these same funds risk again in the UK?

Globally, the appetite for equity to fund upstream exploration is weak. Since the onset of the financial crisis, banks have had more stringent lending criteria; mid cap explorers have had to access alternative debt sources, away from reserve based lending with strict

covenants towards other sources such as corporate bonds. Small caps are struggling to attract financing of any kind at decent conditions because, it seems, exploring for unconventionals is risky business and the upside is per-ceived as uncertain.

With the exception of the North Sea, equity funding for upstream exploration in Europe has all but dried up. Global equity spending on exploration has fallen steadily since 2010, from about USD 100 billion to about USD 50 billion USD per annum in 2013, according to ThomsonONE, a financial services com-pany, although the total global funding has increased (see chart).

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duction companies have fallen out of

favour with investors, according to mar-ket insiders. “There are those who have discovered oil but are unable to raise the funds they need to produce it success-fully,” said Nick Cooper, chief executive of Ophir Energy, a London listed E&P company. “A lot of E&Ps are unfortu-nately at death’s door, or hibernating,” Mr. Cooper added.

According to a global survey by EY, a consultancy, the problem is espe-cially acute for small to medium sized E&P companies with just one project or operating in just one country. While those companies who are able to de-liver and communicate commercial successes are likely to have fewer chal-lenges raising capital.

The EY report says that innovative sources of funding will be needed to close the gap. “Companies are engaging

in higher volumes of farm-out transac-

tions, mergers and loan arrangements with service providers. The ability of the smaller explorers is important to the industry as they are often the source of innovation which is then picked up by their larger peers,” ac-cording to the E&Y report.

Jon Clark, head of oil and gas in Lon-don for EY, believes sources of equity funding will materialize after the UK licensing round closes. “Riverstone has been supporting Cuadrilla for plenty of years, and there is likely to be a bit of interest in the 14th licensing round,” Mr. Clark said.

OH THERE GOES GRAVITYIf not equity, what about the appetite of commercial banks? Since the financial crisis, European banks have struggled to stay profitable compared to their US

counterparts, reducing financing for the day-to-day operations of small and mid cap oil and gas companies. According to a Deutsche Bank research note from late 2013, “European banks on average report poor profitability, are shrinking their business activities, including a pull-back from overseas markets, restructure their operations and are “rewarded” with low share prices.”

According to Andrew Moorfield man-aging director of Scotiabank, since the Deutsche Bank note was issued, Euro-pean banks have become “buoyant, bet-ter than they’ve been in years.” But he cautions that banks in oil and gas will only loan development capital against 1P and 2P, or proven and probable reserves. Bank lending is used only to develop and not to find commercial sources of oil and gas, while equity serves the latter.

Mr. Moorfield thinks equity in the UK will be willing to take upstream exploration risk, especially given Lon-don’s history of taking on North Sea exploration risk.

“Take IGas, who has carved out quite a nice niche. First a public listing and then they acquired Dart. The 14th licens-ing round should bring a richer and more willing ecosystem of equity investors,” Mr. Moorfield said.

“France is probably better than the UK in terms of the resource potential. The two biggest hurdles to equity investors are environmental regulations and com-munity resistance. But look at INEOS. They announced the company will com-pensate private communities more than the government has asked them to. There just may be a way to win the communi-ties over,” Mr. Moorfield said.

“Public and private equity seems to be favorable. Take the example of iGas, who has carved out quite a nice niche.

First a public listing and then they acquired Dart” Andrew Moorfield, Scotiabank

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One Step Forward,One Step Back

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istry of environment has banned high volume hydraulic fracturing.

Finally, the situation remains unclear in Germany, where the government is working on stringent rules for the use of the technology, despite fracking hav-ing a history that spans several decades in the country.

There have been major protests in countries where shale gas exploration is legal, for example the United King-dom and Romania, where protesters have delayed drilling programs. Of the EU pro-shale gas member states, only Poland has been relatively protest-free and exploration by the likes of BNK Petroleum and San Leon Energy in the reportedly most promising areas in

northern Poland has been going on virtually untroubled.

POLANDPoland remains the unquestionable leader in the EU in terms of shale gas exploration, with 69 wells drilled, as of September 2014.

However, the country has seen a num-ber of companies relinquish several li-censes due to low prospectivity. One of the most promising wells in terms of possible gas flow rates, Lublewo LEP-1ST1H, has failed a production test, prompting the co-operator (alongside ConocoPhillips), 3Legs Resources, to withdraw from its three concessions in the Baltic Basin. ConocoPhillips has

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For all the outcry over the €1 billion cost of energy that the European Union has to bear daily - much of it for gas - there’s little that member states have done so for to tap into their own gas reserves trapped in shale rock. Poland remains the leader, with the UK market coming back to life in 2015 and Denmark a surprising new entrant.

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EuropE rEmains a no-man’s land for shale gas, with mere 140 wells drilled to date, and strong op-

position to hydraulic fracturing remains. In some countries public pressure has

led to moratoria on fracking, as in the Czech Republic and France, both of which retain blanket bans on the tech-nology. Following elections in the fall in Bulgaria a new government is expected to be more fracking-friendly.

The Netherlands and Ireland have instituted temporary moratoria on frack-ing, pending further research into the impact of the technology on the environ-ment, which is likely to delay drilling for unconventional oil and gas until 2015, at the very earliest. In Slovakia, the min-


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since said it remains committed to Pol-ish shale - much like 3Legs had been saying until only recently.

There are still a few companies ac-tively searching for shale gas in Poland: state-owned oil and gas firms PGNiG and Orlen Upstream, alongside small independent operator San Leon Energy and ConocoPhilips.

“BNK is continuing to progress and accomplish our commitments for the Bytow, Trzebielino, and Slupsk blocks. We have relinquished Slawno and Staro-gard due to low prospectivity,” said Troy Wagner, BNK Petroleum’s general man-ager, in what is perhaps the best sum-mary of the state of play in Poland: drilling continues amid growing evi-dence of low prospectivity.

Polish shale rock is estimated to hold 346-768 billion cubic meters (bcm) of gas, but figures remain unproven.

UNITED KINGDOMWhile Poland might be seen as losing momentum, the United Kingdom ap-pears to be a market bracing itself for a lot of activity come 2015. Although the country has only a few wells drilled so far, it has seen many companies actively farming-in into concessions overlaying British shale, which analysis shows are several times thicker than the very pro-ductive Barnett shale in the US. It’s esti-mated that the Bowland shale alone could yield 3,681 bcm.

The biggest player in the UK shale gas play is IGas, which took over Dart En-ergy in October 2014 in an all-share deal worth $200 million. Companies like Egdon Resources, INEOS Upstream, GDF Suez and French major Total have also all become vested in British shale during 2014.

On top of this activity from operators, the United Kingdom government launched the so-called “14th licensing round for onshore oil and gas conces-sions” with an application deadline of

October 28, with the results expected in December or early 2015. The licences on offer are located in central Scotland, northern and southern England and cover a total area of approximately 96,000 square kilometers.

SPAINShale gas exploration in Spain - with rough estimates for resources at 88 tril-lion cubic feet - remains in limbo due to a legal debate that ensued after the re-gional parliaments of Cantabria and La Rioja regions passed anti-fracking regu-lations in April and June 2013 that the Constitutional Court overturned short-ly afterwards.

The court said that the bans were unconstitutional because they affected

more than one autonomous commu-nity, in which case it is the prerogative of the central government to handle permitting.

The legal wrangling over the status of fracking in Spain has not deterred op-erators, however, with many currently awaiting approvals for their conces-sions’ applications, which will pave the way to drilling.

Companies that are interested in exploration of non-conventional sources in Spain include Canadian BNK

Petroleum through its two subsidiaries: BNK España Trofagas and BNK Se-dano Hidrocarburos, as well as Pyreenes Energy Spain, Leni Gas & Oil, San Leon Energy-owned Frontera Energy Cor-poration and US company Schuepbach Energy. Finally, state-controlled com-panies - Repsol, SHESA and Petroleum Oil and Gas España - are also putting their stakes in.

DENMARKThe latest addition to EU countries look-ing for shale gas is Denmark, which will see its first shale gas well drilled early next year by a consortium of the Danish North Sea Fund (Nordsøfonden) and Total E&P Denmark

According to Nordsøfonden’s produc-

tion manager Søren Frederiksen, an ex-ploration well targeting shale gas is being planned, with an expected spud date of January 2015. Denmark has an estimated 195 bcm of shale gas, though only 2 on-shore, according to a December 2013 study by the US Geological Survey.

If you would you like to know which companies are actively looking for unconventional oil and gas in the EU-28, have a look at our “Who’s Who” section starting on the page 74.

The latest addition to EU countries looking for shale gas is Denmark, which will see its first shale gas well drilled early

next year by a consortium of the Danish North Sea Fund (Nordsøfonden) and Total E&P Denmark

CLO

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FRO

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The enThusiasm that accom-panied flaring PGNiG’s Lubocino-1 well in September 2011 is now long

gone. Shale gas exploration in Poland has proved to be a tedious and compli-cated process.

Should it turn out to be successful, however, shale may well still generate big profits for the companies involved, at the same time ensuring Poland’s gas inde-pendence. Once such companies as ENI, ExxonMobil, Total, Canadian Oil and Marathon had backed away from Po-land, state owned PGNiG, one of the biggest Warsaw-listed companies, took the role of leader in shale exploration.

There is no going back to 2011, how-ever, when a well flaring in the presence of then Prime Minister Donald Tusk made headlines internationally. It could now appear that PGNiG’s shale projects have hit deadlock.

Perhaps it’s the over enthusiasm of 2011 that makes PGNiG’s current efforts look pale in comparison. Kamil Kliszcz of mBank Brokerage House suggests that PGNiG has finally come to terms with the fact that the Polish shale story is unlikely to be a get-rich-quick one.

SOUND APPROACH“The exploration is not actually very dynamic, but the company has a sound approach to it. [Exploration] needs time, technological improvement, as well as adaptation it to the Polish reali-ties,” Mr. Kliszcz said.

The company is currently working to fine-tune horizontal drilling technology

and fracking parameters. PGNiG is operating 11 shale gas concessions in Poland. Since the heyday of the early concessions the company has given up on four concessions and claims it is concentrating on only the most promis-ing areas now.

“So far we have performed 16 explor-atory drills, including two horizontal. We are successively getting new ones under way in line with our work sched-ule. Data from completed wells is being analyzed now,” PGNiG told the Shale Gas Investment Guide in an email.

“Late this year in Pomerania [the Gdańsk region] we are launching the horizontal drilling phase. These works

are scheduled for 2014-2016 and should allow us to evaluate the commercial shale gas resources in the region. We will be able to specify the necessary expenditure [for exploration], estimate achievable gas flows and, possibly, make a preliminary resource estimation,” PGNiG said.

SHALE GAS: IN PLACEOne thing is certain: time has verified PGNiG’s ambitious plans. “Shale gas is still among PGNiG’s priorities, but we must remember it is still in the explora-tion phase,” said Tomasz Krukowski, an

analyst at Deutsche Bank. In his view, PGNiG prioritized shale gas as just one of many projects it is pursuing: neither a top priority, nor anything to pull the plug on. “Nobody is pushing the brake,” Mr. Krukowski said.

However, it might seem that conven-tional gas will now become PGNiG’s priority, after supplies from Russia are today not just business, but also a hot political issue. The company denies this, though it agrees that its basic goal is to increase production.

“We aim at maintaining domestic output and increasing production abroad, including Norway and other international projects, also covering

shale gas. PGNiG is consistent in carry-ing out its plan to diversify supplies,” the company said.

“PGNiG executives have opened many fronts, where they must make decisions,” said Mr Kliszcz. Besides shale gas, he points to the liberalization of the gas market in Poland, renegotiating the Qatar LNG contract to the Świnoujście terminal, foreign acquisitions plans, and building gas power units.

All of these fronts are fundamental for the company, shale gas being only one of them.

In 2011, PGNiG flared the Lubocino well and Poland was about to enter the era of shale gas. Three years on, shale gas is far from being PGNiG’s top priority.

By S ta n i S ł aw Ko c z ot

Down to EarthP G n i G

Drilling works planned for 2014-2016 should let us evaluate commercial shale gas

resources in the Pomerania region


W A T E R M A N A G E M E N T

Although the shale industry has a reputation for high water usage, it uses far less water than coal mining, for example. The problem that hy-

draulic fracturing, shale gas’ extraction method, has however is that the water it uses is largely lost underground and, secondly, that fracking can add extra stress on water resources in areas where water is already scarce.

A new report by the World Resources Institute, a global sustainability research organization, has recently analyzed pros-pects for global shale gas development in the context of access to water in the world’s leading shale gas plays and at-tached risks. The report suggested recom-mendations to eliminate or at least reduce those risks.

SCARCE WATERUnfortunately for shale gas operators, most shale gas plays in the world are lo-cated in areas where access to water is

subject at least to high seasonal variabil-ity, if exposed to high or extremely high drought severity, or ones that are arid or under high to extreme high levels of water stress.

“Eight of the top 20 countries with the largest shale gas resources face arid con-ditions or high to extremely high baseline water stress where the shale resources are located; this includes China, Algeria, Mexico, South Africa, Libya, Pakistan, Egypt, and India,” the report observed.

In Europe, the problem appears to be less acute than in most countries poten-tially rich in shale gas, with Poland, Ukraine and France with low to medium average exposure to water stress over the shale play area.

RECOMMENDATIONSThe WRI proposed recommendations to minimize water-related risks for shale gas development. First of all, companies should conduct water risk assessments to

understand local water availability. Operators will also benefit from in-

creasing transparency and engaging with local regulators, communities, and indus-try to minimize uncertainty, for example via disclosing and communicating their water use and management approach.

Companies should also engage in pub-lic water policy and minimize freshwater use. “Using publicly available guidelines, companies can evaluate their potential for using non-freshwater sources and build a business case for investing in technology to recycle or reuse water or use brackish water,” according to the re-port. Finally, they can develop a water strategy and engage in corporate water stewardship.

“As governments and businesses ex-plore [for shale gas], freshwater availabil-ity is a key challenge they must address. With interest in shale gas growing, the time is ripe to understand its constraints,” the report concluded.

Strategic Water

The World Resources Institute has mapped shale gas plays exposed to water shortages, where operators will be best off if they employ water management recommendations that will help production and not alienate: people, farmers or other stakeholders.BY W o j c i E c h Ko ś ć

41%

12%9%

6%

11%

21%

BASELINE WATER STRESS

Low

Low to medium

Medium to high

High

Extremely high

Arid & low water use

8%

48%28%

6%

9%

0.0%

DROUGHT SEVERITY

Low

Low to medium

Medium to high

High

Extremely high

17%

39%25%

13%

6%

0.2%

SEASONAL VARIABILITY

Low

Low to medium

Medium to high

High

Extremely high

WAT E R R i s K s i N s h A l E p l AYs W o R l d W i d EplAYs AffEcTEd

percentage

� 38% of shale resources are in areas that are arid or under high/extreme levels of water stress is just one worrying statistic Sou

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hays.pl

Ad CleanTech_Oil & Gas_A4_0514.indd 1 2014-05-14 09:51:30

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G E o p o l i T i c s o f s h A l E G A s

A few yeArs Ago, when the relationship between the EU and Russia was far from the tensions of today, the talk of disentangling

from Gazprom’s grip was more a po-litical mantra rather than a concrete plan.

In 2014, however, Russian annexation of Crimea and the armed conflict in eastern Ukraine reinvigorated discus-sions about reducing Europe’s depen-dence on gas imports. Europe is now looking at boosting domestic supply, via shale gas development for example, or switching to more reliable partners, like Norway, Algeria or Qatar.

The international sanctions on Russia that followed its invasion of Crimea and instigating eastern Ukraine’s breakaway are damaging Russia’s finances. The price of oil is dipping, imports of US LNG from America’s vast shale plays could become a fact in 2017, and some Central Eastern Europe’s EU member

states are on the brink of overhauling the structure.of their gas imports.

“The ongoing crisis in Ukraine has highlighted European energy markets’ dependence on natural gas. The great-est impact will be on Ukraine and countries in southeast Europe that re-ceive Russian gas transiting through Ukraine. Other countries, however, will

be affected through rising spot prices, which may spread from natural gas to other fuels,” wrote Rabah Arezki, head of the commodities team in the IMF’s Research Department on the IMF web-site in October.

Aware of this, some EU countries, are readying to end or at least lessen their dealings with Russia.

In late October, for example, a float-ing natural gas terminal docked at the Klaipeda port in Lithuania. By signing a five-year contract with Norway’s Statoil, Lithuania, along with its neigh-bors Latvia and Estonia, are set to re-duce their dependency on Russian gas by up to 80 percent.

Poland is months away from comple-tion of its own LNG terminal that will take gas under a contract with Qatar, but with its capacity of 5 billion of cubic

meters (to be later increased to 7.5 bil-lion), the terminal will meet up to 50 percent of Poland’s demand for gas. This will give Poland leverage to negotiate a new contract with Gazprom close to its expiration date in 2022.

How does shale gas fit into this pic-ture? While not expected to take off anytime soon in the EU, once (and if)

proved in countries like Poland, the UK or the new hopeful Denmark, it will add to EU’s potential to produce more gas domestically.

This newly increased security is what the new European Commission sees as the first and most important of five pil-lars of the EU energy union. This fur-ther increases the chance of a major change in Europe.

As the new Commission took over in November, the new commissioner for climate action Miguel Canete and the Commission’s vice president for energy union Maros Šefčovič both said that the €1 billion that the EU pays daily for energy imports is no longer sustainable.

Currently, Europe is one of the world’s biggest importers of LNG and natural gas is second most important source of energy in the EU at 24 percent.

Out of the Picture Shale gas in europe, while still fledgling, will be just one factor in a new geopolitical arrangement that can help europe shed dependence on Russian gas with a time horizon of just a few years. Five years ago it seemed hardly possible.

BY W o j c i E c h Ko ś ć

“The greatest impact will be on ukraine and countries in southeast europe. other countries

will be affected through rising spot prices, which may spread from natural gas to other fuels”

Rabah Arezki, head of the commodities team, IMF

l N G ' s E N T R Y p o i N T sTERMiNAls uNdER coNsTRucTioN

capacity in bcm/year

Gijon (Musel) Spain 7

dunkerque France 13

Toscana offshore italy 3.75

Klaipeda Lithuania 4

świnoujście poland 5-7.5

� The polish lNG terminal is scheduled for delivery at the end of 2014. its initial regasification capacity will be 5 billion cubic metres (bcm) annually, to be expanded to 7.5 bcm, which would cover some 50% of the annual polish gas demand.


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Since the government has long talked of shale gas exploration as a policy priority, a special-purpose

law for hydrocarbons exploration, pro-duction, and transportation has been drafted, similar in character to special regimes for road construction or the upcoming LNG terminal.

A special-purpose law (specustawa) is a legal statute that exempts a specific investment from a general permitting regime.

Does proposing a special, shale gas-tailored bill suggest that there is a structural problem with the permitting regime?

Tomasz Chmal Partner White & Case: Such bills show, first of all, that the gov-ernment has difficulty preparing and implementing systemic solutions appli-cable to all investments domestically.

Secondly, the government, aware of its administrative weaknesses and aiming to implement investments despite inter-nal difficulties, is looking for alternatives in the form of special laws. This is choos-ing the second-best option, however.

It appears that in the near future, given the investment difficulties and the man-ner of resolving them, one should ben-efit from the fact that the exception would become the rule. In other words, that the administrative facilitations in-cluded in special-purpose laws would be transferred to the general law and in this way would be applicable to all invest-ments in Poland.

The new law will introduce new dead-lines for the administration to issue

permits and their duration will be much shorter than today. Are these new deadlines feasible, given that institu-tions responsible will continue to be understaffed?

Grzegorz KuśLegal & Tax Advisor PwC: Shortening statutory deadlines for public authorities is not a remedy for solving problems that cause significant delays in shale gas E&P. In the impact assessment of the draft bill there is no analysis of what causes these delays, for example whether delays are because of lack of staff or lack of competences and so on. Un-derstaffed authorities will be certainly not able to issue a decision sooner, even if there will be a statutory deadline.

I am also afraid whether imposing fi-nancial penalties on authorities, which has caused delays to date, will accelerate the issuance of the respective decisions. First of all, individuals will try to use all formal possibilities (e.g. additional sum-mons for clarifications, which suspend deadlines) to avoid penalties. Secondly, such penalties will eventually be paid a taxpayers’ pockets, i.e. from the authori-ties’ budget, to another taxpayers’ pocket, i.e. the state treasury. Also, they could potentially cause extra work in the case of a fined authority filing an appeal.

There are a lot of controversial provi-sions in the draft bill, including the right to expropriate a landowner based on the decision from a province gover-nor (wojewoda), in case of failure to obtain the landowner’s consent to enter the land. How would that affect an operator’s relationship with the local community?

Anonymous LawyerPoland-based operator:It does not surprise me at all that the Polish legislator has come to a reason-able conclusion that shale gas E&P qualifies to be treated as such an ex-traordinary opportunity and a unique investment process that requires special measures, even ones that may some-times seem controversial.

That said, the draft law does not refer to “expropriation” and the term is in my view definitely an exaggeration of what a hydrocarbons investor may poten-tially seek. The draft mentions only the “right to enter” the property, which is limited by a number of factors, includ-ing the time during which the gover-nor’s decision is valid, and the require-ment of the investor to prove the neces-sity to enter a particular property. In other words, it is not that every investor will be entitled to demand such access unconditionally and in all circum-stances.

The draft bill also anticipates an ad-ministrative procedure with the land-owner’s participation, to decide wheth-er the investor’s application is at all justified or not. The landowner will have broad rights of defending himself, both with regard to the application as such, and to the amount of compensa-tion due for using his land.

I have no doubts that the provision in question would only be used by op-erators in cases where it would be basi-cally the only way of getting access to a property, in case it’s truly necessary for the investor to operate. Such provisions may not be popular among local com-munities, but I am also confident that their use will be exceptional.

Oil and gas E&P would greatly benefit from a regulatory framework that would facilitate obtaining drilling or pipeline permits. Or would it? We asked a few industry practitioners for their opinions.

By J u l i u s z Ko wa lc z y K

A Try Too Late?R E G u l a T i o N s


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quality engineering available, equipment and complete solutions tailored

to the client’s individual needs. We provide high capacity fluid transfer

services, utilizing a variety of piping types and sizes for environmentally

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engineers and technicians provides consulting and designing services,

together with performing and completing the most demanding projects

efficiently and on time.

We do not simply meet our client expectations - we exceed it.


A PROMISING LANDOil and gas companies have been ac-tively exploring the contact zone be-tween the east european Craton and the west of the european Platform since the 1970s. the vast majority of the op-erations led in this area have so far in-volved conventional wells. today the target has changed. hydrocarbon ex-ploration is focused on finding uncon-ventional reservoirs that can be eco-nomically viable. the operating company ORlen up-stream, a subsidiary of PKn ORlen, the largest crude oil refining company in Poland, is exploring complex lublin Basin assets that extend under Poland and ukraine. the operator had drilled several vertical wells and two horizontal ones before taking the challenge on drilling Stoczek-Ou1K horizontal well. the aim of this new project was to ex-plore the gas accumulation and produc-ing capability in the lower Silurian and Ordovician shale deposits.

ORlen upstream chose tenarishydril Wedge 563™ connections along with tenaris technical and field services for this operation. as a result, the operator managed to overcome the many chal-lenges posed by this well and reached the target depth.

CHALLENGESPAVING NEW ROADSPoland is recognized for its potential in terms of shale gas. therefore, the coun-try has been working to improve the availability of instruments and equip-

ment, as well as human expertise, to develop the necessary infrastructure. drilling wells costs three times more in Poland than in the united States, making connection performance essential.

the Stoczek-Ou1K well is one of a few

By t e n A r i S

The Polish oil and gas company ORLEN Upstream drilled a challenging horizontal well with TenarisHydril Wedge 563™ premium connections and Tenaris technical and field services.

eXPert’S COrner

ORLEN Upstream and Tenaris find solutions for shale well in Poland

MND Drilling & Services: Longest Shale Horizontal in Europe

W W W.Cle anteChPOl and.COm | 63

shale horizontal wells drilled in Poland so far. as in every exploratory well, many conditions were unknown. this situation called for special product requirements. Superior compression efficiency, torque capability and fatigue resistance were a must for the production casing string that, in order to be installed in the hori-zontal section, had to be pushed and rotated several times to overcome fric-tional forces and thus reach the target depth.

SOLUTIONSHIGH TORQUE RESISTANCE AND COMPRESSION EFFICIENCYFor the challenging Stoczek-Ou1K well, ORlen upstream chose 5 ½” 26.80ppf Q125 with tenarishydril Wedge 563™ for the production casing string. this technology is best-suited for applica-tions that require extreme torque resis-tance. this connection offers field-proven performance and is easy to handle and run. In addition, the Wedge 563™ ensures 100% ratings in tension and compression.

For this operation, the tenarishydril Wedge 563™ premium connection came with the Recess Free Bore (RFB) option to facilitate the undisturbed flow in the well during the fracturing process. to reduce the frictional forces, which occur while running the string into the lateral part of the well, the coupling with special bevel was utilized.

FULL SUPPORTORlen upstream together with tenaris technical sales and field services teams worked side-by-side to ensure the success of the operation.

tenaris supports Poland from its estab-lished presence in Romania and Italy. In Ro-mania, tenaris has its commercial office in Bucharest, its seamless tubes mill in Zalau and the service center in Ploiesti. In Italy, pres-ence consists of seamless mills in dalmine, Costa volpino, Piobino and arcore, as well as R&d facilities and two services centers.

RESULTSA CONNECTION TO RELY ONORlen upstream’s drilling of the Stoczek-Ou1K well was a great success. the tenaris-hydril Wedge 563™ connection facilitated a smooth operation. It presented zero re-makeups and rejects due to product-related matters.

Final survey data of the well was taken at the depth of 4307m md and 2953 m tvd with final inclination 91.5°, with max. recorded dlS of 8.56°/100ft. during the five days long run-ning operation, mud-logging unit recorded

a torque peak of almost 25,000 ft-lb, a maxi-mum rotational speed of 90 RPm and a maximum weight on string of 29,000 lbf. ORlen upstream pressure-tested Stoczek- Ou1K well later on with satisfactory results.

SERVICES THAT ADD VALUEthe expertise of tenaris technical sales team supported ORlen upstream in finding the best solution to overcome the challenges posed by the Stoczek-Ou1K well. the field service specialist was present on the site to share knowledge and experience, providing useful advice whenever the customer re-quired.

ORlen upstream was satisfied with the connection performance. the operator also acknowledged that tenarishydril Wedge 563™ connections were instrumental to reach the target depth.

tenaris experts will use the data gathered in the field to develop a torque, drag & Fa-tigue analysis. the results will improve the understanding of the field conditions during the drilling and running phases, an informa-tion that will be useful when drilling other wells in the future.

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Well Stoczek-OU1K

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ORLEN Upstream’s drilling of the Stoczek-OU1K well was a great success. The TenarisHydril Wedge 563™ connection

facilitated a smooth operation

| Shale Ga S Inve S tm ent GuIde | summer 201464

Shale gaS, dubbed as revolution in energy when it came to light in the US in early 2000s, was expected

to take the world by storm quickly. This is yet to happen, but the odds are grow-ing as the industry is being revolution-ized from the inside by new techniques of horizontal drilling and hydraulic fracturing that almost doubled the ef-ficiency of retrieval of gas from shales.

This increased efficiency is expected to prolong the life of such American plays like the Marcellus, which is ex-pected to yield growing amounts of gas until at least 2020 (see p. 68).

With exploration moving forward, albeit not as fast as in the US, in Argen-tina and, first of all, China, the consul-tancy Allied Market Research has forecasted recently that the value of the global shale gas market will reach $104 billion by 2020. The growth will happen at a compound annual growth rate (CAGR) of 9.3% (CAGR is year-over-year growth rate of an investment over a specified period of time).

According to PacWest, a Texas-based consultancy, unconventional activity in

Argentina has increased over the past year, focused on the promising Vaca Muerta formation in Neuquén prov-ince. “We forecast 228 unconven-tional wells drilled in 2014. This is up

from a forecast of 165 unconven-tional wells drilled in our previous projection,” said Caldwell Bailey, se-nior consultant at PacWest.

The EIA estimates the Neuquén Ba-sin has 583 tcf of technically recover-able shale gas (out of 802 TCF for the entire country), as well as 16 billion barrels equivalent of technically recov-erable shale oil resources (out of 27 bboe for the entire country).

Importantly, unlike in the case of Poland, where estimates of technically recoverable gas in place have been revised down, the EIA has signifi-cantly upgraded Argentina estimates, says Mr. Bailey.

CHINA’S PROGRESSIn China, the progress has been most advanced outside of the US. Despite the Chinese government slashing its early forecast for shale gas production almost by half. Wu Xinxiong, head of China’s National Energy Administra-tion, told industry website cpnn.com.cn that the new output target is 30 bcm of shale gas by 2020, as compared to 2012 estimates of 60-80 bcm.

China, estimated by the US Energy Information Administration to hold world’s largest recoverable shale gas

B y W o j c i e c h K o ś ć

According to some new forecasts, accompanied by news like production getting underway in China’s Fuling play, shale gas market could grow to $104 billion by 2020.

A GrowinG MArket, After All

g l o b a l s h a l e

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230

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398

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w w w.cle antechpol and.com |

gl

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65

there is a problem of the capital looking at investing in shale as extremely risky

reserves of 1115 billion cubic metres (bcm), is eager to mirror the US shale boom. Four years spent on evaluations and drilling have yielded one large find so far, the Fuling field in the Sichuan province.

China’s Ministry of Land and Re-sources said last week that the Fuling

field, China’s first large shale gas play, contained proven reserves of nearly 107 billion cubic metres of gas.

As of June 30, the field’s operator, Chinese state owned oil and gas com-pany Sinopec reached a daily output of 3.2 million cubic metres in its 29 test wells. According to Sinopec, accumu-lated shale gas output from those wells reached 611 million cubic metres. The company has also stated that the gas contains as much as 98 percent meth-ane, with low levels of carbon dioxide and no hydrogen sulphide.

According to Allied Market Research,

other countries that might see produc-tion of shale gas become reality in the next few years are the UK, Poland, as well as Algeria.

What might impede growth, how-ever, are well known issues of more or less shale gas-unfriendly regulatory regimes as well as little to no social

consent to fracking, particularly in Europe. There also is a problem of the capital looking at investing in shale gas as extremely risky.

According to the Financial Times, shale gas investment could be “the sweet spot for some and a sink hole for others,”

the newspaper wrote in September 2014, assessing shale companies’ stocks as “extremely volatile which can repre-sent both opportunity and trap.”

According to the FT, some investors would like to see the sweet spot for bet-ting on the sector in those businesses that provide services rather than those taking the risks – the exploration and production companies. Service compa-nies’ business model tends to be safer and less capital intensive. “That, of course, creates its own problems be-cause too much capital as well as boom-ing demand has led to rising costs,” the newspaper reported.

That said, it has also emerged re-cently that thanks to progress in drilling and fracking technology, shale gas com-panies are now able to make wells prof-

itable at a much faster rate. Cash from operations by 25 leading

North American E&P companies is expected to exceed their capital spend-ing next year for the first time since 2008, according to an analysis by Fact-set for the Financial Times.

PHO

TOPI

N

thanks to progress in drilling and

fracking technology, shale gas companies

are now able to make wells profitable at a

much faster rate

North America 1685

South America 1430

Middle East and Africa 1393

Asia-Pacific 1170

Europe 470

g lo b a l g a sCoNTINeNTal esTImaTes

tcf

� europe might see its estimates revised radically if exploration of UK Bowland confirms BGS’ early estimate that the play holds over 800 tcf of gas in low case scenario.


“I have met allies who can report that Russia, as part of their sophis-ticated information and disinfor-

mation operations, engaged actively with so-called non-governmental or-ganizations - environmental organiza-tions working against shale gas - to maintain European dependence on imported Russian gas,” then-NATO’s secretary-general Anders Fogh Ras-mussen told the London think-tank Chatham House in June 2014.

It’s debatable whether Mr. Rasmussen was merely upping the ante shortly before leaving his NATO post to launch an advisory company just days later. Still, his remark struck a chord in many shale gas producing hopefuls like Po-land, where the notion of Russia inter-fering with shale gas exploration and production has always been present.

THE AXIS OF GASIt’s not a coincidence that Mr. Rasmus-sen talked about Russia. Russia is per-haps the most vocal member of the Gas Exporting Countries Forum (GECF), an organization bearing some similari-ties to oil exporters acting as OPEC.

GECF consists of 11 countries: Alge-ria, Bolivia, Egypt, Equatorial Guinea, Iran, Libya, Nigeria, Qatar, Russia, Trinidad and Tobago, and Venezuela.

The GECF is currently a rather loose group of countries with little power over the global gas market, despite control-ling 67% of reserves, 85% of the world’s LNG production, 40% of global exports and about 65% of LNG trade, according to the group’s own figures.

The GECF countries see shale gas as a potentially disruptive factor to their position and also one that could help converge global gas prices. The Amer-ican shale revolution is already forcing Russia and Qatar to reconsider their LNG trade strategies as the US is no longer a target for their LNG exports. US’ plans to start exporting LNG may affect these countries’ position to an even greater extent.

According to some projections, like the one recently published by consul-tancy Allied Market Research, the global shale gas market could grow to $104 billion in 2020, at a compound annual growth rate of 9.3% between 2014 and 2020 and with a production volume of 19.6 tcf (see also p. 64).

This could prompt the GECF to gal-vanize into a cartel, a possibility that looms even more now than in 2006, when the International Energy Agency (IEA) sounded an early warning of “the possibility of major gas-exporting coun-tries coordinating their investment and

production plans in order to avoid sur-plus capacity and to keep gas prices up.”

Russia, Iran and Qatar combined hold the biggest gas reserves in the world (see chart). These core GECF countries have business-political networks in the EU, such as Gazprom’s clients or partners such as OMV, Total, BASF, which have an influence on decision makers and the European regulatory framework, as in the case of pipeline projects like North Stream or South Stream.

“Natural gas imports [to] the EU will rise to 420 billion cubic meters by 2015 and already reach 470 billion cubic meters by 2020, which repre-sents an increase of 42% compared to 2009.Thanks to its enormous reserves and the well-functioning gas transport infrastructure, Russia in particular is in a position to cover the increasing energy requirements in Europe,” Ma-rio Mehren, member of the board of executive directors at Wintershall, a BASF subsidiary, told none other than the Gazprom Magazine in July 2014.

The GECF countries have been seen to leverage their position against other states by, for example, cutting off supplies in the middle of winter, as Russia did to Ukraine four times in the last eight years, in 2006, 2009, and twice in 2014 to date.

B y G o r d o n W A s i l e W s K i

on the globalized energy markets, stakes are running exceptionally high. no wonder that the potential rise of shale gas has the guardians of the old order on high alert.

eneMies of new order

T h e g e C F


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WHAT IS TO BE DONE?To counteract this, Mr. Rasmussen told Chatham House, the EU should ac-tively support the development of the Southern Gas Corridor, a pipeline link-ing Azerbaijan gas fields to Turkey and further into the EU via Georgia, by-passing Russia. The pipeline could also take in Iranian gas in the future, to an obvious detriment of Russia’s own exports to Europe.

The outgoing EU’s commissioner on climate action Connie Hedegaard pre-sented a different point of view. She told the European Parliament in Sep-tember 2014 that the EU needs to work on reducing its imports of fossil fuels, including gas, as part of its low-carbon economy strategy.

The EU’s strategic agenda until 2020 stipulates that the bloc’s authorities will endeavour to establish an energy union through an interconnected and inte-grated energy market, reduced energy dependency (especially from Russian gas), increase the security of energy supply and “make full use of the EU’s collective bargaining power.”

The EU also wants the US to sell its gas to Europe, according to leaks on the Transatlantic Trade and Investment Partnership (the US-EU free trade agreement) from the Council of the European Union, published by the Washington Post in July.

“EU negotiators appear to be stepping up pressure on the US not only to sig-nificantly increase exports of its new-found natural gas surplus - a contentious process that is already underway - but also to weaken a longstanding ban on crude oil exports,” the newspaper re-ported in July.

However, according to Edward Chow, a senior fellow with the Center for Strategic and International Studies, it is increasing domestic European gas production rather than betting on American LNG that is much more

important in terms of reducing Europe’s dependence on Russian gas.

The US produced around 25.6 tcf of gas in 2013, but this was largely for the domestic market as the US’s export ca-pacity is limited both legally and techni-cally. That said, Americans are deter-mined to open themselves to foreign markets and claim they could start ship-ping gas to Europe as early as in 2017.

“Several NATO countries, as well as non-NATO allies in Europe like Ukraine, have shale gas reserves that could be produced. There is substantial evidence that Gazprom and Russia have made efforts to undermine political

approval for such projects. Were Europe to overcome those interferences, it could likely replace most of Russia’s supply. Russia’s major export agreement with China seems to suggest Putin is already preparing for that possibility,” said Ezra Levant, the author of Ground-swell: The Case for Fracking.

Gazprom pricing of gas for its Euro-pean clients doesn’t seem in line with factors of economic or logistic nature, but seems to reflect ties each country has with Moscow, according to Mr. Levant.

For example, Ukrainian prices rose immediately after the former administra-tion was kicked out by protesters and the new authorities took over. Belarus, with close ties to Mr. Putin, has the lowest gas prices in Europe (under $200 per 1,000 cubic metres) while Poland - which buys 54 percent of its gas from Gazprom and is a transit nation to Russia’s European clients - pays more than $500.

“To counteract Russian expansion it is necessary to enact disciplined and far-reaching economic policies with an equal obstinance and engagement, fo-cusing mainly on building national hydrocarbons production and transmis-

sion infrastructure,” said Izabela Al-brycht, chairwoman of the Kościuszko Institute, a Polish think-tank.

The GECF countries are not ready to let go of their dominant position. If shale gas jeopardizes their business, at least some of them will counteract.

“The undemocratic bullies of the world, led by Moscow, are carving up the globe into spheres of influence, constricting supply to raise prices and colluding to use gas as a political weap-on,” Mr. Levant said.

“the undemocratic bullies of the world, led by moscow, are carving up the globe into spheres of influence, constricting supply

to raise prices and colluding to use gas as a political weapon” ezra levant, author

country natural Gas Proven reserves

organization or possible alignment shale potential

Russia 48,700 GECF Unclear

Iran 33,600 GECF None

Qatar 25,100 GECF None

Turkmenistan 17,500 GECF influence None

United States 9,460 NATO Significant

Saudi Arabia 8,200 GECF/NATO influence None

Venezuela 5,524,5 GECF Unclear

Nigeria 5,246 GECF None

Algeria 4,502 GECF Unclear

Australia 3,825 NATO influence Significant

T h e g a s pa C kNaTural gas reserVes

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� Two leading GCEF countries, Russia and Iran are, unfortunately, at odds with the West on pretty much everything, increasing probability of gas geopolitics turning nasty.


B y W o j c i e c h K o ś ć

there are no signs of the uS shale bonanza abating anytime soon. According to the most recent analysis, the marcellus and utica plays are in for rising production volumes until 2020 at least.

MArcellus keeps on BooMinG

u s

the marcelluS shale play, which marked a decade of drilling in 2014 and six years since indus-

trial scale production began, is poised for further growth in production, ac-cording to a recent study from Wood Mackenzie, a consultancy.

The Marcellus kicked off production in 2008, growing to 10.9 billion cubic feet per day (bcfd) in December 2013. Its cumulative production is still small, only 6.7 trillion cubic feet (tcf), compared with its estimated technical reserves of 140 tcf, as reported by the US government’s Energy Information Administration.

Other major plays like the Barnett, Haynessville and Fayeteville, are see-ing production levels decline, even if

the two latter plays began producing about the same time as the Marcellus. The Marcellus’ output, however, is expected to grow unabated until at least 2020.

“As such, we have raised our fore-cast of 2020 output from 14 bcfd to 20 bcfd and estimate that the Marcel-lus will soon account for nearly 25%

of total US shale gas supply,” wrote Wood Mackenzie in a commentary in November 2014. The estimated value of gas to be recovered from the Mar-cellus is €90 billion by 2020.

Other key performance factors for the 30-million acre play spanning four states include: 25,000 wells to be drilled by the top 20 operators by 2035, with well results improving to estimated ultimate recovery (EURs) in the top areas increasing by ap-proximately 10% since 2013, thanks to the use of longer laterals and high-volume completions, Wood Mackenzie said.

Finally, the recovery factor of the Marcellus is 9.3% based on EIA esti-

mates of its technical reserves of 140 tcf, according to a recent analysis published by the Oil and Gas Journal in November 2014. That is 58% high-er than the average recovery factor for the three mature major gas plays.

Thanks to its likely continual growth in production, the Marcellus shale will remain pivotal to the US

shale gas boom, which could see the country energy independent by 2025, for the first time in almost 60 years.

Bentek Energy, the forecasting unit of Platts, found that gas production in the US averaged 69.9 billion cubic feet per day in October, breaking the previous record and posting the 10th straight month of gains. The forecast for annual daily average is at 67.9 bcfd. This figure includes the Utica, an emerging shale play, which lies beneath the Marcellus and which, according to the EIA, outpaces other plays - including the Marcellus - in terms of productivity.

For comparison, in 2009, the United States averaged 55.1 bcfd.

“We have raised our forecast of 2020 output from 14 bcfed to 20 bcfed and estimate that

the marcellus will soon account for nearly 25% of total uS shale gas supply”

Wood mackenzie

� of the four main US shale plays, only Marcellus’ production curve has kept grow-ing. Growth will continue until 2020 at least.

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the argentIne government and the country’s oil-producing prov-inces approved in mid-September

a new hydrocarbon law seeking to clarify and centralise regulation to at-tract investors to the country’s vast but underdeveloped shale resources. Sup-porters hope it will encourage invest-ment by standardizing opportunities under unified regulations. However, many believe broader macroeconomic issues should be the priority.

Argentina’s unconventional geology is considered world class. The EIA esti-mates the country holds the world’s second-biggest shale gas (802 trillion cubic feet) and fourth-largest shale oil (27 bboe) reserves. But the billion-dollar investments required to exploit these resources to scale has not come.

Capricious government policies, in-flation estimated at 40%, and strict capital and foreign exchange controls make Argentina a problematic invest-ment destination. Ongoing litigation with holdouts seeking full repayment on restructured bonds forced the coun-try into default in July, worsening an already difficult economy.

Some investors have come, though at a cautious pace. In 2013 Chevron signed a US$1.24 billion deal with national oil company YPF, now moving ahead to a US$16-billion 1500-well-programme by 2017. Total is present, as is Shell, which this year committed to grow shale investments by US$500 million.

Malaysia’s Petronas inked a US$550 million deal with YPF in late August

2014 for a 30-well Vaca Muerta pilot launching in the first quarter of 2015. Others players include BP, ExxonMobil, Pan American, Petrobras and several local operators.

PacWest, a Houston-based consul-tancy, estimates 182 unconventional wells were drilled in 2013, with best-case scenario for 2014 seeing 230 new wells.

SWEETENERSProspective investors will note that the new law allows companies investing over US$250 million to export 20% of produc-tion tax-free after five years, and import equipment without restrictions.

Concessions for unconventional projects receive 35-year leases, with ten-year extensions available. Royalties start at 12%, increasing 3% per lease extension to a maximum of 18%. Taxes are set at 3%.

“My impression is that this is a posi-tive step. It gives the appearance of a more streamlined process”, said Caldwell Bailey, senior consultant at PacWest. But more is needed. “Do I

think it’s sufficient? No, it’s a piece that will be nice when other things perhaps change”, Mr. Bailey said.

A roadmap to financial normalisation is what many analysts want to see. Elec-tions are slated for the final quarter of 2015 and Fernandez cannot run again. All three prospective candidates are considered more market-friendly than the outgoing administration, making long-term prospects for a default reso-lution optimistic.

However, the new law addresses cur-rent pressures. “A new law is needed. But [does the government] need to improve conditions? Yes, much more than a new law”, said Luciano Caratori, head researcher at the Argentine En-ergy Institute, an independent industry research center. “We’re committing [to a law] because of a current situation that’s temporary”, but “in a few years conditions will change again”, he said.

The government and YPF, which helped design the law, want “to make the business attractive as a way to offset the cost that instability creates,” said Mauricio Roitman, chief economist at energy consultancy Montamat & As-sociates. But during better times, “there’s no need for the extraordinary income” that foreign operators will receive at the government’s expense, he adds.

This could be a reason to change regulation once again. But investors, says Mr. Bailey, are after “a government that decides on a regime, sticks with it, and isn’t constantly adjusting its policy as the wind blows”.

a r g e N T I N a

B y d A v i d G A c s i n B u e n o s A i r e s

Argentina drafts a new hydrocarbon law, but investors remain doubtful.

stABle At lAst?

PacWest, a consultancy,

assumes best-case scenario for 2014 will

see 230 new wells


LNG is usuaLLy associated with maritime transport of gas, enabling trade between countries not linked

with a pipeline. The gas is transported from a domestic source, liquefied, shipped to another country, regasified, and then fed into the national transmission grid. This can be called big LNG, where liquefaction and regasification is how gas is moved between independent gas networks, typi-cally at long distances.

However, natural gas can also be lique-fied, transported by tanker trucks, then regasified and fed into a local distribution network or directly to end users. This is called small LNG. The similarity is in using a liquid state to enable a transport alterna-tive to pipeline, the difference is the scale.

A look on the map of Poland’s transmis-sion network show, that there are areas with no, or limited, access to the distribu-tion network, leaving potential end users of gas - for example companies processing agricultural produce - in limbo.

TECHNICAL ALTERNATIVELaying a pipeline network is a costly invest-ment, up to PLN 1 million (€237,000) per kilometer. This capital intensity imposes strict economic requirements on distribu-tors, as they usually define a minimal

numbers of end users and levels of con-sumption, ensuring sufficient return on investment. Economic considerations are underpinned with technical issues, for examples difficult terrain conditions ag-gravating the cost.

Where it is too expensive to build a pipeline, or there are potential end users for gas but insufficient in their number, small LNG is the solution.

A typical small LNG regasification plant costs PLN 1-1.5 milion. It is constructed along with local distribution networks (up to 20 km) or it is built to feed gas directly to an end user’s facility.

Gas for a small LNG plant arrives lique-fied on special tanker trucks and is pumped into a cryogenic storage tank, which keeps the gas in liquid state. It is regasified by evaporators, and then pumped through a set of measurement and odorizing machinery to the distribu-tion grid or other facilities, where it is used the same way as pipeline gas would be.

A typical end user is a small town gas distribution network, an individual resi-dential estate, a small or medium manu-facturing or processing facility, espe-cially in the food industry (meat, vegeta-bles, fruit processing), but also ceramics or construction materials manufacturers.

In other words, the demand is likely to come from any facility using process steam for production.

Small industry users consume up to a few million of cubic meters of gas annually. By comparison, the largest Polish gas consumer, ZA Puławy, a major fertilizer manufacturer, exceeds 2 billion cubic meters.

Key parameters of an LNG station are its storage capacity and regasification ca-pacity that determine its ability to respond dynamics of demand. A typical LNG site takes an area of a few hundred square meters, while storage tanks is usually over ten meters high, and a few meters in di-ameter - tall and thin cylindrical shape limits the effect of self-vaporization.

A GROWING MARKETSmall LNG is considered to be a niche market. The equivalent volume of gas traded is below 0.5% of annual Polish consumption. However, with many areas in need of gas, the market is poised for growth. The volume of small-scale LNG trade increased from about 35 million cubic meters (Mcm) in 2011 to over 43 Mcm in 2013, which translated into a market value of PLN 72 million in 2013.

Various businesses, from multi-com-

S m a l l - S c a l e l N G

A Gap to Fill

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In Poland, natural gas is widely used by both domestic and small industry clients. Remote locations with moderate gas consumption are sometimes prohibitive to costly pipeline investment, making it not economical. Enter small scale LNG: a niche but growing market.

J u l i u S z K o w a l c z y K


modity traders like Barter to the state gas company PGNiG are interested in enter-ing the small LNG market. Another ex-ample is Norwegian oil and gas major Statoil, which is currently working to es-tablish a position on the Polish market as an LNG supplier.

The eastern Polish region of Podlasie is the region where small LNG could grow fastest, as it is the region with least access to a network. That does not rule out finding location for small LNG installations even close to the grid. For example, there are LNG stations relatively close to the trans-mission grid in north-west of Warsaw - Nowy Dwór Mazowiecki and Leoncin.

Any place can become a potential loca-tion for a small LNG facility if two factors are met. First, there has to be a commer-cial activity involving gas use. Second is prohibitive costs of pipeline investment or no transfer capacity offered. For ex-ample, a company distributing gas to a mid-sized town in central-southern Po-land required that at least 250 end users are supplied for a PLN 2.8m distribution pipeline to be profitable. It is important to note that, in the long term, small LNG system might be insufficient, thus it may serve so-called pre-gasification stage for any given area. When the availability of gas attracts strong demand from a large number of users, the pipeline becomes a permanent, long-term solution.

The main obstacle to market growth is limited supply. According to Mr Mariusz Caliński, CEO of the largest independent Polish gas trader DUON, most LNG, around 70%, is sourced from the PGNiG denitrogenation plant in Odolanów. Sig-nificant volumes, roughly 15-20%, can be obtained from Kaliningrad, Russia, even if Russian imports tend to be unstable due to political and customs issues. The EU fills the rest, especially from Zeebrugge terminal in Belgium, but the costs of 1000 km of road transport are high, so this direction is rather used for compliance with the Polish legal requirements on

supply diversification than for business

reasons. Finally, around 5 Mcm of gas per year is provided by LNG Silesia near Mikołów, the world’s first facility turning methane vented from a coal mine to LNG.

On the side of future supply, there are two new LNG terminals under way in the region, the Klaipeda floating termi-

nal in Lithuania and a much larger onshore one in Świnoujście, Poland. Both are planned to provide truck-filling facilities potentially further boosting small LNG trade and helping spread investment in small regasification fa-cilities across the country.

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Zeebrugge,Belgium

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LNG station

Density of distibution network(km/100km2)

Main LNG import directions

chrzan (lNG production facility)

A trouble-ridden Krioton facility later taken over by DUON (now CP Energia). Operations kicked off in 2009, but the target production of 100 tons per day was never achieved. Following problems with getting sufficient EU financing, CP Energia sold the facility in its first year of operations to Blue Gas Engineering.

tucznoA regasification station acquired by Unimot in 2014 in a deal considered a showcase of Unimot's strong commitment to increase presence in the gas market.

czarna Białostocka

Barter's first (and only to date) LNG station. Despite being small, the company aims to become a leading energy company of Podlasie region.

Dąbrowa Białostocka

GASPOL's first LNG station. It will provide heating gas for a housing community.

PeSoPESO stands for Pisz, Ełk, Suwałki, Olecko. Providing gas for these four towns was not only a way for PGNiG to enter the small LNG market - it was also considered a duty of the state gas company.

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� the map shows the number of LNG stations by voivodship, sources of supply, extension of transmission network, and intensity of distribution network. Also, notable LNG facilities are pointed out (see table below). LNG market in Poland is set to grow fast off a low base: the estimated market value was PLN 72m in 2013 and the traded volume of gas was just over 31,200 tonnes.

u P a N D co m i N G

Small lNG, at a GlaNce


a new promising method of forcing gas from shale rock is underway by a team of Polish scientists. It will use super-cooled co2 that will expand in the hot conditions of shale rock deposits to release natural gas, itself remaining locked underground. Lab work has been done to good results and the method is set to hit the well pads in two years.

z u z a N N a m a r c h a N t

a prototype method of fractur-ing gas-bearing shale rock with liq-uid CO2 rather than a mix of water,

sand or ceramic proppant and chemicals, has just won PLN 50 million (€11.8 mil-lion) financing that could propel it for-ward to commercial use. The financing comes from a research and development program known as Blue Gas, aimed at the shale gas industry. Despite a recent slowdown in the pace of exploration in Poland, the program keeps going in the hope of supplying best technologies to fit Polish geological conditions.

Blue Gas is a joint undertaking of the National Centre for Research and Development (NCBR) and the Indus-trial Development Agency (ARP). Its focus is on supporting integrated large R&D projects, testing the results on pilot schemes and commercialization of innovative technologies in the area of shale gas extraction.

The applications it uses are from research-industrial consortia and

need to meet certain criteria. Primar-ily, they have to design innovative technology related to shale gas extrac-tion, which has to be tested in real conditions. The project leader has to be an entrepreneur interested in im-plementation of the technology on an actual well pad or along shale gas’s exploration and production chain.

DIOX4SHELLDiox4Shell is a technology of using liquid CO2 instead of water and chemicals for hydraulic fracturing. It has been developed beween the Polish oil and gas company PGNiG as project leader, academics from the Military University of Technology (WAT), AGH University of Science and Technology and Warsaw University of Technology who did the research and testing. The team is working under the direction of professor Tadeusz Niezgoda.

“[The technology] involves intro-ducing CO2 into the deposits as a

supercritical fluid, or an incredibly cold liquid under low pressure, with low viscosity and high mobility of molecules,” said WAT’s Danuta Miedzińska, one of the leading re-searchers on the project. “This liquid, due to the temperature in the de-posit - above 100 degrees Celsius - expands and causes fracturing,” Ms. Miedzińska said.

“The method is environmentally safe, does not require the use of water and added chemicals, and carries no risk of causing local earthquakes,” Ms. Miedzińska also said. Miedzińska adds that the proposed use of CO2 as super-critical fluid differs from a known technology using CO2 to fracture shale rock. In a method in use for years now, companies use CO2 instead of water, so their fracking is simply pumping huge amounts of the gas, under high pressure, down towards the deposits, which causes fractures and increases the permeability of the rock, which

Release Gas, Trap CO2

f r a c K i N G t e c h N o l o G y


Diox4Shell uses liquid CO2 instead of water

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leads to the extraction of gas. Unfortunately, as Ms. Miedzińska

points out, the drawback is that CO2 goes back, adding to the technology’s carbon footprint.

Diox4Shell works with the quirks of the Polish shale rock, rather than against them, the researcher says, and it effectively traps CO2 in rock.

“We’re using a different physical process. What works in our favor is the process of preferential adsorption of CO2 towards CH4 in Polish shale. What it means is that normally most of the shale gas is adsorbed - or ‘at-tached’ - to the porous surface of shale

rock, but CO2 is able to ‘rip off ’ the methane particles and replace them – thus, we have a safe process of stor-ing CO2 and an increase, by as much as by a factor of 4, the amount of ex-tracted methane,” Ms. Miedzińska said.

WHAT’S NEXT?The Diox4Shell researchers plan to resolve construction problems so that the method would be available to apply in field conditions as soon as possible. This, Ms. Miedzińska believes will take about two years.

“Our work will last two years, start-

ing in December 2014, and its purpose is to design a whole technological pro-cess of extracting gas based on our method. It involves a wide variety of work, especially in the lab, such as lowering the costs and the risk of re-search,” Ms. Miedzińska said. “We plan to resolve construction problems to ensure that this technology is possible to use in real conditions,” she added.

The first public presentation of the new method to a wide audience of industry professionals will take place in March 2015, during the Central and Eastern Europe Shale Gas and Oil Summit in Warsaw.

“the technology involves introducing co2 into the deposits as supercritical fluid, or an incredibly cold liquid under low pressure,

with low viscosity and high mobility of molecules,”danuta Miedzinska, lead project researcher`

l Denmark p.76

l Germany p.77

l Poland p.78

l Romania p.84

l Slovenia p.84

l Spain p.85

l Sweden p.86

l UK p.87

COUNTRIES

The 8th issue of the Shale Gas Investment Guide brings you up to speed with what’s going on in terms of shale gas exploration in the EU-28. The exploration is still fledgling, with most active markets - with the exception of Poland - seeing a handful of wells driled at best and very little stimulation. Poland remains the most active market, even though the belief that it can pull off the feat of shale gas production by 2016 has

waned. Despite minor activity, it’s the UK where the European shale gas dynamics is at the time being, with 2015 slated to be a breakthrough year for drilling.

Guide


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76| Shale Ga S Inve S tm ent GuIde | winter 2014

DENMARK

CONTACTINFO

Nyhavn 43, 2, 1051 Copenhagen, [email protected]

bOARDMEMbERSJim Ratcliffe Andy Currie John ReeceJim Dawson

hOlDINGCOMPANIESTotal SA

c o n c e s s i o n a r e a

Aalborg

Concession areaSkagen

Grena

Aarhus

Aarhus

Copenhagen

concessions HeLD

name acreage (km2)

wells

L1 / 10 2,972

2 / 10 2,289

Until 2016, Total will be conducting a series

of preliminary studies to determine

[if] shale gas exists in Danish shale

formations

COMMENT:

The drilling of the first shale gas well on Nordjylland concession in Denmark is expected at the beginning of 2015. At the time of print, the most recent development on-site was a local council’s aproval to establish water wells following review of two complaints to the Environmental Board of Appeal, a local environment policy body.

- Cleantech Poland

CONTACTINFO

Peter Helmer SteenCEO

Amaliegade 45, 1256 København (+45) 72 26 57 50 [email protected], www.nordsoefonden.dk

bOARDMEMbERSPeter Helmer Steen

Denmark needs to find new O&G

reserves in the next decade to remain

energy self-sufficient before it goes all

renewables in 2050


Aalborg

Concession areaSkagen

Grena

Aarhus

Aarhus

Copenhagen

COMMENT: “The Danish North Sea Fund (Nordsøfonden) is involved in two licenses for unconventional gas (shale gas) onshore Denmark. Nordsøfonden is participating as partner, and Total is the operator in both licenses. No wells for shale gas has been drilled in these two licenses. In license 1/10 an exploration well targeting shale gas is being planned, expected spud date is January 2015.” - Søren Frederiksen, Production Manager

staKe inconcession

nameinterest

(%)Holder

L1/10 20 TOTAL E&P DENMARK BV

2 / 10 20 TOTAL E&P DENMARK BV

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GERMANY

CONTACTINFO

Riethorst 12, 3069 Hannover. Postfach 51 03 60, 30633

Telefon: 0511 / 6410 [email protected] www.beb.de

bOARDMEMbERSNicholas DaviesJohn McGoldrickEytan UlielMartin CooperMark Lappin

hOlDINGCOMPANIESBEB Erdgas und Erdol

COMMENT:

ExxonMobil, the world’s biggest private sector oil company by market capitalization, said it had developed non-toxic fluids specifically intended for the geological conditions in Germany. The fluids have yet to be tested under field conditions.

- The Financial Times, April 2014

concessions HeLD

name acreage (km2)

wells

Ahrensheide 429

Bramsche-Erweiter-ung - 3

Delmenhorst-Elsfleth -

Dummersee-Uchte Zusammenl 845 1

Hamwiede -

Harpstedt -

Herford -

Ibbenburen -

Krummhorn -

concessions HeLD

name acreage (km2)

wells

Minden -

Misburg 232

Munsterland-West -

Nordrhein-Westfalen Nord 6,617

Schaumburg-Verk-leinerung - 1

Scholen - 1

Simonswolde

Taaken Rest 197

Unterweser


Magdeburg

HannoverMunster

KölnKassel

Erfurt

Frankfurt am Main

Concession area

CONTACTINFO

Friedrich-Ebert-Straße 160 34119 Kassel, Germany (+49) 561 301-0 [email protected] www.wintershall.com

bOARDMEMbERSRainer Seele Martin Bachmann Ties Tiessen Gerhard König Mario Mehren

hOlDINGCOMPANIESWintershall Holding GmbH

COMMENT: Wintershall is involved in the scientific exploration process for shale gas at the Rheinland and Ruhr concessions in North Rhine - Westphalia. The program consists of special rock sampling and analysis to provide clues about gas content at greater depths. The activities include shallow drilling to provide rock samples from up to 300 meters under the surface.

concessions HeLD

name acreage (km2)

wells

Ridderade-Ost 342

Ruhr 2,493


Magdeburg

HannoverMunster

KölnKassel

Erfurt

Frankfurt am Main

Concession area

- Wintershall website

“Our activities are limited to prelimi-

nary geological sur-veys. Deep drilling

and fracking are not planned”

Joachim Punnel, director of operations


POlAND


CONTACTINFO

Kamlesh ParmarCEO

ul. Chmielna 13A00-021 Warsaw(+48) 22 505 91 77www.3legsresources.coml

bOARDMEMbERSKamlesh ParmarDavid BremnerRichard HillsTim EggarRod Per

hOlDINGCOMPANIESLane Energy Exploration Lane Resources Poland

RUSSIA LITHUANIA

BELARUS

SLOVAKIA

CZECHREPUBLIC

GERMANY

Zone of interestConcession area

Łódź

Poznań

Wrocław

Rzeszów

Olsztyn

Gdańsk

Szczecin

WARSZAWA

Lublin

Bydgoszcz

Katowice Kraków

COMMENT: In September 2014, 3Legs Resources decided to withdraw from its three western Baltic Basic concessions, fol-lowing “sub-commercial” results of the Lublewo LEP1-ST1H well. In early November 2014, the company sold its eastern Baltic Basin concessions to Stena Group for mere €500,000.

- Cleantech Poland

concessions HeLD

name acreage (km2)

wells

Cedry Wielkie* 809 1

Stegna* 625

Godkowo* 904

* sold to Stena in November 2014

staKe inconcession

nameinterest

(%)Holder

Damnica* 30 ConocoPhillips

Lębork* 30 ConocoPhillips

Karwia* 30 ConocoPhillips

* withdrawal pending

COMMENT: Currently, BNK has three concessions at Baltic Basin: Bytów, Trzebielino and Słupsk. The first two permits if not extended will expire in March 2015, whilst Słupsk license was extended until 2018. The company relinquished Sławno and Starogard concessions.

CONTACTINFO

Troy WagnerGeneral Manager

ul. Wiktorska 6302-587 Warsaw(+48) 22 540 17 50www.bnkpetroleum.com

bOARDMEMbERSWolf RegenerWarren NelsonCoenraad LeoHans HandlerDavid NelsonMartin Robert

hOlDINGCOMPANIESIndiana Investments Saponis Investments


RUSSIA LITHUANIA

BELARUS

SLOVAKIA

CZECHREPUBLIC

GERMANY


Łódź

Poznań

Wrocław

Rzeszów

Olsztyn

Gdańsk

Szczecin

WARSZAWA

Lublin

Bydgoszcz

Katowice Kraków

concessions HeLD

name acreage (km2)

wells

Słupsk 919 1

Bytów 1,169 2

Trzebielino 1,167 1

“BNK is continuing to progress and ac-complish our com-

mitments for the Bytów, Trzebielino and Slupsk blocks”

Troy Wagner, general manager

- Cleantech Poland

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POlAND

CONTACTINFO

John ClaussenCountry Manager

Aleja Wyścigowa 6 02-681 Warsaw (+48) 22 460 100 www.chevron.coml

bOARDMEMbERSJohn WatsonGeorge Krikland

hOlDINGCOMPANIESChevron Polska Energy Resources


RUSSIA LITHUANIA

BELARUS

SLOVAKIA

CZECHREPUBLIC

GERMANY


Łódź

Poznań

Wrocław

Rzeszów

Olsztyn

Gdańsk

Szczecin

WARSZAWA

Lublin

Bydgoszcz

Katowice Kraków

COMMENT: Chevron Polska Energy Resources signed an agreement with PGNiG in March 2014, involving Chevron-owned licenses Zwierzyniec and Grabowiec and PGNiG-owned Tomaszow Lubelski and Wiszniow-Tarnoszyn. According to the agree-ment, companies will exchange geological data and experience. The first well to fall under the agreement is PGNiG’s Majdan Sopocki well in the Tomaszów Lubelski concession.

- Cleantech Poland

concessions HeLD

name acreage (km2)

wells

Zwierzyniec 824 1

Kraśnik 1,194 1

Frampol 1,178 1

Grabowiec 1,195 1

Chevron removed equipment from

leased land in Zurawlów, Grabowiec concession, the site of

a long-standing protests from local

farmers

CONTACTINFO

Laurie St AubinCountry Manager

Rondo ONZ 1 00-124 Warsaw (+48) 22 209 04 00 www.conocophillips.com

bOARDMEMbERSRyan Lance

hOlDINGCOMPANIESConocoPhillips E&P Poland ConocoPhillips Poland BV Lane Energy Poland


RUSSIA LITHUANIA

BELARUS

SLOVAKIA

CZECHREPUBLIC

GERMANY


Łódź

Poznań

Wrocław

Rzeszów

Olsztyn

Gdańsk

Szczecin

WARSZAWA

Lublin

Bydgoszcz

Katowice Kraków

COMMENT: ConocoPhillips will take over full ownership of its Baltic concessions that it had been developing with 3Legs Resources, after 3Legs decided to give up on their shale gas exploration following negative well result. - Cleantech Poland

concessions HeLD

name acreage (km2)

wells

Damnica 784 1

Lębork 1,062 5

Karwia 209 1

Following withdrawal of 3Legs’ Resources,

ConocoPhillips stated that they would con-tinue works on their

concessions in Poland Cleantech Poland


POlAND

CONTACTINFO

Pawel ŻukCountry Manager

Aleje Jerozolimskie 81 02-001 Warsaw (+48) 22 695 02 70 www.huttonenergy.com

bOARDMEMbERSDavid MessinaCharles Morgan Craig Burton

hOlDINGCOMPANIESStrzelecki Energia Strzelecki Energia Warszawa Strzelecki Energia Mazowiecka Strzelecki Energia Łukowska Strzelecki Energia Wołomin Strzelecki Prabuty Południowe


RUSSIA LITHUANIA

BELARUS

SLOVAKIA

CZECHREPUBLIC

GERMANY


Łódź

Poznań

Wrocław

Rzeszów

Olsztyn

Gdańsk

Szczecin

WARSZAWA

Lublin

Bydgoszcz

Katowice Kraków

COMMENT:

“We recognize that early results may not have been as positive as expected, however we remain optimistic about Poland. Hutton holds a diverse portfolio of mixed assets and we are targeting three basins with significant potential.”

concessions HeLD

name acreage (km2)

wells

Poddębice 645

Łódź Zachód 809

“We are going through a process of modifying and extending conces-sions. We will continue to operate in Poland”

David Messina, managing director

- Anna McMaster, Hutton’s communication director

CONTACTINFO

Tomasz TarnowskiCommunications

Al. Jerozolimskie 65/79 00-697 Warsaw +48 22 553 85 14 www.petrolinvest.pl

bOARDMEMbERSBertrand Le Guern Franciszek Krok

hOlDINGCOMPANIESECO Energy 2010

COMMENT: The Chodel, Głubczyce, Grudziądz, Kędzierzyn-Koźle, Maków Mazowiecki and Opole concessions expired in August 2014. License holder of two remaining concessions is Eco Energy 2010. Repki and Siemiatycze concessions will expire in November unless the Ministry of Environment extends them. - Cleantech Poland

concessions HeLD

name acreage (km2)

wells

Repki 882

Siemiatycze 892

staKe inconcession

nameinterest

(%)Holder

Lidzbark Warminski 31.67 Wisent

Węgorzewo 31.67 Wisent

Gołdap 31.67 Wisent

Kętrzyn 31.67 Wisent


RUSSIA LITHUANIA

BELARUS

SLOVAKIA

CZECHREPUBLIC

GERMANY


Łódź

Poznań

Wrocław

Rzeszów

Olsztyn

Gdańsk

Szczecin

WARSZAWA

Lublin

Bydgoszcz

Katowice Kraków

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POlAND

CONTACTINFO

Piotr GliniakHead of Exploration

ul. Kasprzacka 25 01-224 Warsaw (+48) 22 691 79 67 www.pgnig.pl

bOARDMEMbERSMariusz ZawiszaJerzy KurellaJarosław BaucZbigniew SkrzypkiewiczWaldemar Wójcik

hOlDINGCOMPANIESPolskie Górnictwo Naftowe i Gazownictwo


RUSSIA LITHUANIA

BELARUS

SLOVAKIA

CZECHREPUBLIC

GERMANY


Łódź

Poznań

Wrocław

Rzeszów

Olsztyn

Gdańsk

Szczecin

WARSZAWA

Lublin

Bydgoszcz

Katowice Kraków

concessions HeLD

name acreage (km2)

wells

Wejherowo 731 8

Kartuzy-Szemud 783 1

Stara Kiszewa 1,178 2

"172" 937

"173" 937

"192" 922

"193" 942

concessions HeLD

name acreage (km2)

wells

Kock-Tarkawica 1,028 1

Pakosław Krotoszyn 1,096

Wiszniów-Tarnoszyn 1,106 1

Tomaszów Lubelski 741 1

Górowo Iławeckie 1,094

COMMENT: As of September, PGNiG has drilled six wells in 2014 to date, according to information sent to the Shale Gas Investment Guide by the company. This will complete the company’s exploration plan in the Baltic Basin in 2014. Next year, however, will see the company says move on to horizontal drilling and hydraulic fracturing of the Batlic Basin wells.

- Cleantech Poland

CONTACTINFO

Dominika MackiewiczPR Specialist

ul. Przyokopowa 31 01-208 Warsaw +48 22 778 02 00 www.orlenupstream.pl

bOARDMEMbERSDariusz Jacek Krawiec Sławomir JędrzejczykPiotr ChełmińskiKrystian PaterMarek Podstawa

hOlDINGCOMPANIESOrlen Upstream


RUSSIA LITHUANIA

BELARUS

SLOVAKIA

CZECHREPUBLIC

GERMANY


Łódź

Poznań

Wrocław

Rzeszów

Olsztyn

Gdańsk

Szczecin

WARSZAWA

Lublin

Bydgoszcz

Katowice Kraków

COMMENT: Executing the company’s strategy for 2014-2017, Orlen Upstream, a subsidiary of state-controlled PKN Orlen, has drilled 10 wells (seven vertical, three horizontal) and carried out two fracs. Another frac will be performed still this year on Stoczek-OU1K well. Also, a new horizontal well will be drilled on the Wierzbica concession

concessions HeLD

name acreage (km2)

wells

Garwolin 884 1

Lubartów 1,156 3

Bełżyce 1,019

Lublin 967 1

Wierzbica 702 3

Hrubieszów 415

Sieradz 917

Wołomin 1,180

Wodynie-Łuków 1,191 2

- Cleantech Poland

Orlen Upstream’s current exploration strategy is still to determine most perspective areas in held concessions so as to narrow down acreage where further investment

will take place

Cleantech Poland


POlAND

CONTACTINFO

Oisin FanningExecutive Chairman

ul. Mokotowska 1 00-640 Warsaw (+353) 1291 6292 www.sanleonenergy.com

bOARDMEMbERSOisin FanningPaul SullivanRay KingDaniel MartinJeremy BoakPiotr Rozwadowski

hOlDINGCOMPANIESAurelian Oil and Gas Poland Joyce Investments, San Leon Rawicz, San Leon Praszka, Helland Investments, Gora Energy Resources, Maryani Investments, San Leon Wschowa, Liesa Energy, San Leon Czersk, South Prabuty LLP, Oleśnica LLP, Baltic Oil&Gas Sp z o.o., Wieluń LLP


RUSSIA LITHUANIA

BELARUS

SLOVAKIA

CZECHREPUBLIC

GERMANY


Łódź

Poznań

Wrocław

Rzeszów

Olsztyn

Gdańsk

Szczecin

WARSZAWA

Lublin

Bydgoszcz

Katowice Kraków

concessions HeLD

name acreage (km2)

wells

Iława 746

Praszka 1,199

Czersk 702

Gdańsk W 894,41 1

Braniewo S 1037 1

Szczawno 603,4 1

COMMENT:

“We are excited by the current shale activity in Poland, where our Gdansk W concession is in the middle of the most well-re-garded shale area of the Baltic Basin. Upcoming well tests results from some of our peers, together with plans for a multi-fractured horizontal well on Gdansk W, bode well for news flow.”

- Joel Price, COO of San Leon Energy

CONTACTINFO

Pl. Piłsudskiego 3 00-078 Warszawa +48 22 449 00 00 www.PalomarNR.coml

bOARDMEMbERSJohn Buggenhagen

hOlDINGCOMPANIES

COMMENT:”I am very excited to be returning to Poland and once again to work with San Leon, but this time as a partner. I truly believe in these production based assets and the significant exploration upside that exists across all seven concessions.”

- John Buggenhagen


RUSSIA LITHUANIA

BELARUS

SLOVAKIA

CZECHREPUBLIC

GERMANY


Łódź

Poznań

Wrocław

Rzeszów

Olsztyn

Gdańsk

Szczecin

WARSZAWA

Lublin

Bydgoszcz

Katowice Kraków

In July 2014, Palomar signed a USD 20m joint venture with

San Leon Energy on 7 concessions, some targeting unconven-

tional O&G in Poland’s Permian Basin

concessions HeLD

name acreage (km2)

wells

Rawicz 742 -

Góra 706 1

Nowa Sól 1166 2

“San Leon continues to believe in the po-

tential of its Gdansk W concession.”

- San Leon Energy’s news

`


What’s your background and when did you go into busi-ness for yourself?

Both my business partner and I worked as translators prior to starting Bireta. I have a Masters in English Philology from the University of Warsaw and my business partner Joanna Woźniakowska has a Masters and Engineering Degree from Warsaw Polytechnic.

How did you get into specialized translation of technical docu-ments?Over the past thirteen years, Bireta Translations earned the trust of clients in the energy, gas and environmental protection sector. Thanks to our 40 in-house employees and 60 cooperat-ing freelance translators we can turn-around more than 200 pages a day. For instance, we are working on the the Turów Power Plant (Mitsubishi Hi-tachi) and Jaworzno Power Plant (Envi Con), Siekierki Project (Andritz) as well as Gorzów CCPP Project (Siemens).

How do you handle the workflow of such complex projects? We use specialized software for trans-lation service providers such as SDL

Trados Studio and ApSICXbench. The software allows translators and veri-fiers to work on the same document and maintain cohesion and consis-tency within the text. The proofread-ers verify consistency and correctness. Finally the documents are checked that they reflect the original layout.

What’s a good example of a few challenging projects?One of the most challenging projects we a re working on right now would be a Waste-to-Energy facility, which is being built for the Białystok by our client Keppel Seghers. Another one would be new power unit being built in Kozienice where we work for

Consortium of Mitsubishi Hitachi and Polimex - Mostostal.

What’s one activity you like to do that your clients might not know?I love skiing in winter and windsurfing in summer. I also workout daily which I alternate with running. I feel exercise gives me a lot of energy and keeps my spirits high.

Where can your clients find you, or connect with you? You can visit us on our website www.bireta.pl, also from November 25-26, 2014 we will be present at Ter-rapinn Shale Gas World Europe in the Cleantech Pavilion.

Ms. Areta Kempińska has been a partner of Bireta Translations since 2002 where she coordinates

the written and oral translation departments.

Bireta - thirteen years of technical translation services

a D v e r t o r i a L

PIC

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: BIR

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PIC

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: BIR

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One of the most challenging projects

we are working on right now would be a

waste-to-energy facility, which is being

built for the City of Poznań.

M s. a r e ta K e M p i n s K a


ROMANIA/SlOVENIA

CONTACTINFO

Str. Gh. Moceanu nr 9 Sector 1 Bucuresti, Romania

(+40) 21 5996100 (+40) 21 5996101

www.chevron.com

bOARDMEMbERSJohn Watson George Krikland

hOlDINGCOMPANIESChevron Romania Exploration and Production SRL


Bucharest

Concession area

COMMENT:

“Chevron can confirm that initial exploration drilling activities were completed at its well site near Silistea, Vaslui County in June 2014. Chevron is now analyzing the data gathered during its drilling and seismic operations to further understand the resource potential of natural gas from shale.”

- Razvan Mitroi, communications advisor for Chevron

concessions HeLD

name acreage (km2)

wells

Adamclisi 900

Barlad 6,350 1

Costinesti 900

VamaVeche 900

“Chevron owns and operates the 1.6 mil-

lion-acre Barlad Shale in northeast Romania,

and three conces-sions, 670,000 acres, in southeast Romania

Cleantech Poland

CONTACTINFO

Ascent Resources plc 5 Charterhouse Square London EC1M 6EE (+44) 020 7251 4905 www.ascentresources.co.uk/

bOARDMEMbERSClive CarverLeonard ReeceColin HutchinsonNigel Moore

hOlDINGCOMPANIESAscent Resources plc

COMMENT: Ascent Resources plc is an independent oil and gas exploration and production company that was admitted on AIM, operated by the London Stock Exchange, in November 2004 (LSE:AST). Since then its portfolio has consisted of pre-dominantly European onshore projects.

- Ascent Resources website

concessions HeLD

name acreage (km2)

wells

Petišovci 100 2


Ljubljana

Concession area

Ascent currently op-erates the Petišovci tight gas project in

Slovenia which it con-siders to be an out-standing prospect

Ascent Resources website

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SPAIN

CONTACTINFO

Wolf E. RegenerDirector, President & CEO

760 Paseo Camarillo, Suite 350, Camarillo, CA 93010www.bnkpetroleum.com/

bOARDMEMbERSWolf Regener Warren NelsonCoenraad LeoHans HandlerDavid NelsonMartin Robert

hOlDINGCOMPANIESTrofagas Hidrocarburos SL


Barcelona

Concession area

Valencia

Madrid

concessions HeLD

name acreage (km2)

wells

Urraca 948

Sedano 348

BNK submitted six separate EIA docu-ments for its explo-

ration permits on its Sedano and Urraca

concessionsBNK Petroleum website

COMMENT:

Urraca and Sedano target principally shale gas but the concessions range from dry gas through liquids rich gas to oil potential. In addition, the concessions may have conventional oil and gas potential.

- BNK Petroleum website

CONTACTINFO

43 Grosvenor Street Mayfair. London W1K 3HL United Kingdom (+44) 20 3617 3913 [email protected] www.sanleonenergy.com

bOARDMEMbERShOlDINGCOMPANIESFrontera Energy Corporation S.L.

concessions HeLD

name acreage (km2)

wells

Aquiles 1664

Cronos 970

Geminis 479

Libra 379

Spain is a currently under-explored coun-

try, with fewer than 500 exploration wells

drilledSan Leon Energy

c o n c e s s i o n a r e a *

Barcelona

Concession area

Valencia

Madrid

COMMENT: San Leon through its subsidiary Frontera Energy Corporation obtained two more onshore licences in Spain in 2013, further enhancing our shale acreage position in Europe and complementing that already held in Spain. We now hold over 1.5 million net acres (6000 square kilometers) in Spain.

- San Leon Energy press office


SPAIN/SWEDEN

CONTACTINFO

EDIFICIO PLAZA BIZKAIA ALAMEDA DE URQUIJO, 36-PLANTA 1ª E-48011 BILBAO (+34) 944035600 [email protected]

bOARDMEMbERSPilar Urruticoechea

hOlDINGCOMPANIESSOCIEDAD DE HIDROCARBU-ROS DE EUSKADI


Barcelona

Concession area

Valencia

Madrid

COMMENT:

Sociedad de Hidrocarburos de Euskadi (SHESA) and the other Spanish companies that have submitted drilling applications are waiting for environmental approval for their projects from the central government.

- SHESA’s website

concessions HeLD

name acreage (km2)

wells

Angosto-1 261

Usapal 749.3

Mirua 752

Enara 758.5

Usoa 727

SHESA plans to drill the first of several

wells in 2015Company website

CONTACTINFO

Mats BudhCEO

(+46) 70 650 62 26 Skålmyrsvägen 36 792 50 Mora, Sweden [email protected]

bOARDMEMbERSOla BlumenbergErik NerpinAnders WellgrenAlexander Shkuta

hOlDINGCOMPANIES

concessions HeLD

name acreage (km2)

wells

Hansjo 132

Eldris 3

Nordvasta Skattungen nr 2 34

Norra Morafaltet 6

Norra Gullerasen 110

Stenberg 0.04

Sodra Morafaltet 4.5

Vamhus 2.5

Sydvastra Boda nr2 12.5

Nordvasta Skattungen 34

Sydvastra Boda 12.5 1

Tina 3


Concession area

concessions HeLD

name acreage (km2)

wells

Ryssa 38 9

Ryssa nr 3 7

Vastra Gullerasen nr 2 3

Solleron 6

Vastra Gullerasen 3

Norra Gullerasen nr 2 110

Oresjon 124

Oresjon nr 2 124

Nusnas 0.4

Moldtjarnen 2

Vastbjorka 29

Lisselhed 22

Stumsnas 170

COMMENT:

“The Siljan Ring is the largest known im-pact crater in Europe, caused by a major meteorite impact. Hydrocarbons in the form of methane gas trapped in water, gas and shale oil have been found of which the origin and size is being ex-plored by Igrene.” - Mats Budh, CEO

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SWEDEN/UK

CONTACTINFO

Niclas BiörnstadCEOVasavägen 76, 181 41 Lidingö, Sweden(+46) 72 222 [email protected]/

bOARDMEMbERSMy SimonssonTorgny BerglundPeter SchweizerStephen CrabtreeSven Erik Zachrisson

hOlDINGCOMPANIES


Concession area

concessions HeLD

name acreage (km2)

wells

Hov 6

Nyby 15

Orlunda 9 1

Abylund 19

Appelby 77

Yxstad 10

Karlsfrid 7

Eneby 13

Rodjan 8

Vinberga 19

concessions HeLD

name acreage (km2)

wells

Skedet 6

Smedsby 26

Melby 20

Sandon nr 1 161

Ekeby 188 16

Greby 71

Naset 3 2

Ossby 62

Lundeby 17

Vallstena 94

Buttle 614

COMMENT:

“We are in the process of developing a Northern European methane gas project from a shallow reservoir in a politically stable environment.” - Niclas Biörnstad, CEO

CONTACTINFO

Francis EganCEO

Cuadrilla House Stowe Court, Stowe Street Lichfield, Staffordshire WS13 6AQ, UK (+44) 1543 266 444 www.cuadrillaresources.com

bOARDMEMbERSLord BrowneHaroun Van HovellJohn LancasterAllan CampbellTony KellyRoy FranklinFrancis EganTony CarruthersAndrew Quarles

hOlDINGCOMPANIESCuadrilla Resources Holdings Ltd

concessions HeLD

name acreage (km2)

wells

PEDL 165 1,131 4

PEDL 244 154 1

EXL 189 45 1

EXL 269 55 1

Cuadrilla expects that following positive out-

come of current ap-plications, drilling will

begin in 2015Cleantech Poland


Concession area

COMMENT: “Cuadrilla has submitted a planning application to Lancashire County Council for its proposed Roseacre Wood shale gas exploration site. The proposal covers the works required to drill, hydraulically fracture and test the flow of gas from up to four exploration wells on the site.” - Matt Lambert, Government and Public Affairs Director


UK

- Cleantech Poland

CONTACTINFO

John McGoldrickCEO

Laurel Hill Business Park Polmaise Road, Stirling FK7 9JQ, UK (+44) 333 800 2000 www.dartenergy.com.au

bOARDMEMbERSJohn McGoldrick Robert Neale Shaun Scott Stephen Lonie

hOlDINGCOMPANIESGP Energy Dart Energy (Europe)

COMMENT:

When it was acquired by IGas in October 2014, Dart held 24 UK licences and has agreements with France’s Total SA and GDF Suez to fund exploration of potential shale gas fields.

- Cleantech Poland

concessions HeLD

name acreage (km2)

wells

PEDL 012 50

PEDL 133 367

PEDL 200 120

PEDL 207 30

PEDL 210 10

EXL 288 10

PEDL 147 90

PEDL 185 100

PEDL 186 100

staKe inconcession

nameinterest

(%)Holder

PEDL 139 17.5 IGas

PEDL 140 17.5 IGas

concessions HeLD

name acreage (km2)

wells

PEDL 187 70

PEDL 189 100

PEDL 195 100

PEDL 196 75

PEDL 198 75

PEDL AL010 75


Concession area

CONTACTINFO

Mark AbbottManaging Directors

The Wheat House 98 High Street, Odiham Hampshire, RG29 1LP, UK (+44) 1256 702292 www.egdon-resources.com

bOARDMEMbERSMark AbbottPhilip Stephens Jerry Field Walter Roberts Ken Ratcliff Andrew Lodge

hOlDINGCOMPANIESEgdon Resources U.K.

COMMENT: Egdon Resources after the deal with Alkane Energy became the second largest shale gas company in the UK with around 566km2 of shale gas acreage.

concessions HeLD

name acreage (km2)

wells

PL 161 18

PL 162 18

PEDL 209 64

EXL 253 3

PEDL 1 11

PEDL 11 6

PEDL 37 10

PEDL 39 3

PEDL 43 57

staKe inconcession

nameinterest

(%)Holder

PEDL 139 14.5 IGas

PEDL 140 14.5 IGas


Concession area

- Cleantech Poland

concessions HeLDPEDL 182 n/a

PEDL 191 66

PEDL 202 84.2

PEDL 209 64

PEDL 237 n/a

ACQUIRED BY IGAS

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UK

CONTACTINFO

Jean Claude PerdiguesManaging Director

40 Holborn Viaduct London EC1N 2PB (+44) 203 122 1400 www.gdfsuezep.co.uk

bOARDMEMbERSJean Claude Perdigues Delphine Cherel-Sparham Ian Conacher Andy Hirsch Rob Buchen Andy Spancer Steve Thomson

hOlDINGCOMPANIESGDF SUEZ E&P UK Ltd


Concession area

staKe inconcession

nameinterest

(%)Holder

EXL 273 25 Dart Energy

EXL 288 25 Dart Energy

PEDL 12 25 Dart Energy







staKe inconcession

nameinterest

(%)Holder





CONTACTINFO

Andrew AustinCEO

7 Down Street London W1J 7AJ UK (+44) 207 993 9899 www.igasplc.com

bOARDMEMbERSAndrew AustinStephen BowlerJohn BlaymiresFrancis GugenJohn BryantRobin PinchbeckCuth McDowell

hOlDINGCOMPANIESIsland Gas

concessions HeLD

name acreage (km2)

wells

PEDL 139 100

PEDL 140 141

PEDL 107 211

PEDL 116 102

PEDL 145 102

PEDL 145N 102

PEDL 184 386

PEDL 190 386

PEDL 193 296 1

IGas has agreed to take over rival Dart Energy in

an all-share deal for $200 mln. The deal will con-

clude in OctoberCleantech Poland


Concession area

COMMENT: “We are delighted to have secured a suitable rig for our exploration well at Ellesmere Port. This well, similar to the one we successfully drilled at Barton Moss earlier this year, is to further appraise the geology in the North West and an-other step in unlocking Britain’s onshore energy resources.” - Andrew Austin, Chief Executive

COMMENT:

GDF SUEZ will maintain 25 percent shares concessions after the acquisition of Dart Energy by IGas.

- Cleantech Poland


UK

CONTACTINFO

Christophe de MargerieChief Executive Officer

Crawpeel Road, Altens Aberdeen, Hampshire AB12 3FG, UK (+33) 1 47 44 45 46 www.total.com

bOARDMEMbERSPatrick PouyanneThierry DesmarsetPatrick ArtusPatricia BarbizetGunnar Brock

hOlDINGCOMPANIESTotal E&P UK Ltd


Concession area

staKe inconcession

nameinterest

(%)Holder

PEDL 139 40 IGas

PEDL 140 40 IGas

PEDL 209* 50 Egdon

* Opt-in agreement pending 2015

COMMENT: Unconventional gas, such as shale gas, requires specific extraction techniques tailored to their geological formations. This is a promising sector where we are strengthening our positions thanks to our proven expertise.

- Total E&P UK website

Even where we are not the operator, we will

support operating com-panies in employing best

practices to minimize environmental impact

Total E&P UK website

CONTACTINFO

Gary HaywoodCEO

3 Avenue des Uttins CH-1180 Rolle Switzerland Tel: +41 (0) 21 627 7040

bOARDMEMbERSJim Ratcliffe Andy Currie John ReeceJim Dawson

hOlDINGCOMPANIESINEOS Upstream, INEOS ABS, INEOS Barex, INEOS Bio, INEOS ChlorVinyls, INEOS Enterprises, INEOS Melamines, INEOS Nitriles, INEOS Olefins & Polymers Europe, INEOS Olefins & Polymers USA, INEOS Oligomers, INEOS Oxide, INEOS Paraform, INEOS Phenol, INEOS Styrenics, INEOS Technologie

concessions HeLD

name acreage (km2)

wells

PEDL 133 329 1

PEDL 162 400

“We do believe that positive progress in any European country will

set the tone for the rest of Europe”

Gary Haywood, CEO


Concession area

COMMENT: “With our large UK asset base, existing operating capabilities and exemplary safety and environmental record, we are well placed to become a major player in the UK onshore gas production sector”

- Gary Haywood, CEO of INEOS Upstream

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- Gary Haywood, CEO of INEOS Upstream

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Guide


ServiceSdirectory

� Poland slumps, UK is on the rise. How are the service markets responding to this story?

In general, the service market has shrunk in Poland, as the country has lost its momentum, as operators have given up on their concessions. Service companies are shifting their focus to the UK, a promising market, just like Poland in 2010. UOS, an equity backed service company with roots in the US, has hired an agent to grow their UK business. Geofyzika Toruń, a seismic ser-vices company, and the largest in Europe, is looking also to the UK for growth.

Although the British shale gas story is only at its start, it has already attracted IOCs Total and GDF Suez. As of today, only a couple of wells have been drilled in the UK, but the government has recently closed a licensing round, hoping to attract investors.

Furthermore, the UK has introduced favorable regulations for operators interested in exploring for onshore oil and gas. Service companies will reflect this shift by putting a stake in this market. As a reflection to the growth of interest in the British onshore gas market, this service direc-tory will provide you with a list of companies operating in Europe with a focus on companies that are present in the UK.

Piotr Wdowiński (+48) 883 307 [email protected]

C o m m e n t a r y

P i o t r W d o W i n s k i P r i n C i P a l a n a l y s t , C l e a n t e C h P o l a n d


europe unconventional oil and gaS


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DRILLING

Casing & Cementing BakerHughes Exalo Halliburton Schlumberger Weatherford UOSdirectional drilling BakerHughes Drilltech Halliburton Exalo MeehanDrilling Kerui Schlumberger Weatherford UOSdrill Bits, Fluid systems BakerHughes Exalo Halliburton MI-SWACO Sirius Pruit UOS Schlumbergerdrilling tools and services BakerHughes Bentec Drilltech Exalo JSHDrilling Kerui NationalOilwellVarco Pruittengineering and modeling CCS CoreLaboratories(Saybol) Geolog ILF Wellynx NationalOilwellVarcohard Banding Arnco HardbandingSolutionsmud logging BakerHughes Drill-Lab Exalo Geolog GEO-data Geokrak Halliburton Schlumberger UOS WeatherfordmWd and lWd BakerHughes Halliburton Schlumberger Weatherford UOSPipe supply JSHDrilling NationalOilwellVarco SumitomoEurope Tenaris USSteel Workstringsrig Contracting DiscoveryDrilling ExaloKCADeutag MNDDrilling NationalOilwellVarco UOSWaste management EkoTechEnergy MI-SWACOWell Pad Construction CDMSmith NTSConstruction

Casing & Cementing BakerHughes Exalo Halliburton Schlumberger Weatherford UOSChemicals Brenntag ChampionTechnologies ClearSolutionsInt.Ltd. DOW DowCorning DowMicrobial MultiChem SibelcoEuropeCoil tubing BakerHughes Drill-tech Halliburton Exalo MeehanDrilling Schlumberger Weatherford UOSequipment supply BakerCorp BalancePointControl Bentec C.A.T. CAT DiscoveryDrilling Drill-Lab Drilltech GEOil&Gas ITS(Parker) JSHDrilling Kerui NationalOilwellVarco PackersPlus SuperiorEnergyServices TechPomp Tenaris UOS Weir WorkstringsPressure Pumping BakerHughes Halliburton Exalo Schlumberger Tenaris Weatherford UOSProppant supply BalticCeramics WeirWater management AECom BakerCorp CDMSmith GEOil&Gas PP-EKO Veolia Tech-Pomp

COMPLETIONS

Basin modeling Argo BakerHughes GEO-Data Geokrak Geomage Kidova Pangea SerafimConstruction of Well Pads Construction of roads CDMSmith NTSConstructionCorporate services PWC TrinityCorporateServices MWHGlobal PecoFacet RiskToReputationdata services Argo ION EmersonProcessManagement GEO-Data Geokrak GeofizykaKraków GeofizykaTorun Geolog Geomage Geotrace IHS Kidova Pangeadue dilligence CleantechPolandenvironmental services AECom CDMSmith GSEEnvironmental Inwatec PP-EKO SalamanderGroup URS VeoliaWaterFacilities management DBMServices EmersonProcessManagementGeological analysis Argo BakerHughes GEO-Data Geokrak Geomage Kidova LMKR Nutech Pangea Serafimhuman resources HAYS IPGroupland man CDMSmith IPGroupPermitting CDMSmith IPGroupseismic services AcousticGeophysical AppliedSeismologyConsultants ION GeofizykaKraków GeofizykaTorun IPGroup ION UOStechnical translation Bireta

3RD PARTYSERVICES


96 | Shale Ga S Inve S tm ent GuIde | sUmmer 2014

Logo company SpecIalIty area addreSS contact

Acoustic Geophysical Services (Viking)

Seismic services CEE Ul. Chłodna 11 lok. 425 00-891 Warsaw

(+48) 667 985 [email protected]

Acoustic Geophysical Services provides acquisition services for land seismic projects. Viking Services B.V. (Viking) an-nounced the completion of its acquisition of Acoustic Ventures, LLC (Acoustic Geophysical Services) in late 2012. In a company statement, AGS said they will continue to provide seismic acquisition services in eastern and central Europe.

AECOM General services Global

MidCity Place 71 High Holborn London WC1V 6QS United Kingdom

(+44) 20 7645 2000

AECOM is a global provider of technical and management services to in transportation, facilities, environmental, energy and water. AECOM has 45,000 employees in 140 countries and 2013 revenue of $8.2 billion. The Poland office was awarded a Chevron contract in 2013. Follow AECOM on Twitter at @AECOM.

Applied Seismology Consultants Ltd

Seismology, Microseismic UK

Claremont Buildings, 5 Claremont Bank, Shrewsbury, Shropshire SY1 1RJ, United Kingdom

(+44) 1743 271440

ASC specialises in providing microseismic monitoring of rock masses and concrete structures, particularly applied to Pe-troleum, Shale Gas, Geothermal Energy, Mining, Radioactive Waste storage, Carbon Dioxide storage, Civil Engineering and Laboratory Testing industries.

Archer Well-Allis Chalmers

Integrated Oilfield Services

UK, Denmark, Norway, Global

Archer, Main Road, Blackburn, Aberdeen AB21 0BP, United Kingdom

(+44) 1224 767 500 archerwell.com

Archer is a global oilfield service company that specializes in production drilling, unconventionals, well intervention and well integrity. Archer employs 8,300 people. The name “Allis-Chalmers” is the name of the former company, the Allis-Chalmers Manufacturing Company. In February 2011, Allis-Chalmers Energy merged with Seawell to form specialist drilling and well service company Archer.

Argo Geological Consultants

Seismic Services Netherlands

Bachlaan 46, 3706 BD Zeist, The Netherlands

(+31) 306 959 150 [email protected]

Argo Geological Consultants offer geo-scientific services to the oil and gas industry. Formed in 1987, Argo consultants perform the following services: seismic interpretation, geological and geophysical mapping, stratigraphic prediction, reser-voir modeling, and E&P team support. Argo Consultants can be seconded to the client office.

Arnco Hardbanding Global Aberdeen United Kingdom

(+44) 774 028 0302 [email protected]

Arnco Technology Trust, Ltd. - Arnco - does hardbanding in a history that dates to 1946 when its founder Roman F. Ar-noldy developed and patented a hardfacing alloy. Arnco Technology has products to improve drill string performance and casing wear protection. Consider the product for extreme conditions in deeper, more critical, directional and horizontal extended reach wells.

AVISHIP Logistics (maritime) France

Bat D3, 135 Av Pierre Semard, 84000Avignon, France


AVISHIP is dedicated to maritime transportation of project cargo, breakbulk and heavylifts. AVISHIP has a 10 year history providing lifting and maritime transport, consulting expertise and services in maritime engineering and brokerage. The company works in the energy, oil and gas industries, in projects related to civil engineering, offshore drilling and marine infrastructure.

Baker Corp Liquids and sludge storage

North America, Europe

North Lincolnshire, DN20 8UN, United Kingdom

(+48) 604 113 028 [email protected] (PL)(+49) 1 70 7693978 [email protected] (UK)

BakerCorp provides containment, pumping and filtration equipment and services. BakerCorp provides temporary steel storage tanks to the oilfield industry. The company has 100 locations in the U.S.A. and operators internationally in Europe, Canada and Mexico. Markets include chemical, manufacturing, refining, oil and gas, construction, municipal, industrial services, environmental remediation and wastewater.

Baker Hughes All integrated well services Global

France Office and Ul. Rondo ONZ 1, 00-124 Warszawa

(+44) 203 320 4900 [email protected]

Baker Hughes is an oilfield services company. Baker Hughes operates in 90 countries, providing drilling, formation evalu-ation, completion, production and reservoir consulting services. Baker Hughes has its headquarters in the America Tower in the American General Center in Houston. Baker Hughes Incorporated was formed when Baker International and Hughes Tool Company merged in 1987.

Balance Point Control BV

Balanced pressure and wireline services

UK, Germany, Netherlands

Cumberland House, Endeavour Drive, Arnhall Business Park, Westhill Aberdeenshire AB32 6UF United Kingdom

(+44) 1224 651 077 [email protected]

Balance Point Control (BPC) provides hydraulic work over, snubbing, well control, engineering, wireline and rental ser-vices. Equipment includes Space Saver 385K, 340K Unit, 600K Unit, HWT 600K, Pulling Units, Casing Jack and Wireline Unit. Projects include water production shut off, straddle recovery, safeguarding a blown out well and securing a chemi-cally contaminated well.




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Baltic Ceramics Proppant Polandul. Reymonta 7, 68-300 Lubsko Poland

(+48) 22 654 66 14 [email protected]

Baltic Ceramics retails proppants and other products used in the extraction of hydrocarbons from un-conventional oil and gas formations. Baltic Cerammics is the first proppant distributor on the Polish market, and aims to build a large production facility through both private and public funding sources.

BDP International Logistics Global Braderijstraat 11, Antwerpen, B-2000, Belgium

(+32) 3 234 5711 bdpinternational.com

BDP provides logistics services: air, ocean and ground - through the use of subsidiaries throughout Europe. In Poland they work with POL-MARE, ul. 17 Stycznia 32 lok. 2/8 02-148 Warszawa and C.E. TRANSPORT POLAND SP. Z O.O., ul. Osmanska 5, 02-823 in Warsaw. The company is privately owned and located in Philadelphia, Pennsylvania in the U.S.A.

Bentec Rig and drill manufacturer

Europe, Middle East

Deilmannstraße 1, 48455 Bad Bentheim


Bentec is a manufacturer of drilling rigs and oilfield equipment worldwide based on 125 years of history. A vertical inte-grated systems provider, their drilling solutions include engineering, design and manufacturing customized drilling rigs, drilling components and electrical control systems. They can provide 24/7 field support and can repair or overhaul rigs.

Bireta Translation Polandul. Bronikowskiego 3/1, 02-981 WarsawPoland

(+48) 22 648 55 77 [email protected]

Bireta provides technical translation services up to several thousand pages per month. A project management team guides translators and proofreaders in the construction, process control, electrical, mechanical, natural gas and information technology sectors. Projects include FGD Plants, wind farms, power units, CFB boilers, Combined Cycle Power Plants, CCS plants, NOx denitrification plants, and the LNG Regasification Terminal.

Brenntag Chemical distribution Global

Rawdon Park, Green Lane, Yeadon, Leeds LS19 7XX, United Kingdom

(+44) 113 3879200

Brenntag is a chemical distributor headquartered in Germany. Brenntag operates a global network in 70 countries em-ploying 13,000 and generating sales of €9.7 billion in 2012. Brenntag links chemical manufacturers to users with 10,000 products and claims to be market leader in Europe.

C.A.T. Equipment, Tubing, Proppant

EuropeCelle, Vorbruch 6, 29227Germany


C.A.T. is a designer, manufacturer and marketer of oilfield equipment. A 20 year history, C.A.T.’s product lines include equipment for well stimulation, well workover and service, including drilling, coiled tubing, nitrogen pumping, cementing, acidizing and sand control equipment. Headquartered in Celle, Germany C.A.T. is vertically integrated: C.A.T. Construc-tion GmbH, TACROM Service S.R.L., and TACROM Drilling S.R.L. among its sister companies.

C.H. RobinsonLogistics, Supply Chain Management

GlobalAl. Jana Pawła II 29 Warsaw, Poland

(+48) 22 653 65 30 [email protected]

C.H. Robinson is one of the world’s largest third party logistics (3PL) providers offering multimodal transportation services and logistics solutions. In Poland, C.H. Robinson works with shale gas operators and service companies to manage air and ocean freight forwarding, customs brokerage, intra-continental distribution, documentation, and regulatory requirements.

CB&ITechnology, Procurement Construction

Global40 Eastbourne Terrace, London, W2 6LG, United Kingdom

(+44) 20 7053 3000 cbi.com

Chicago Bridge & Iron Company, commonly known as CB&I, is a large multinational conglomerate engineering, procure-ment and construction (EPC) company. CB&I specializes in projects for oil and gas companies. According to one of the founder’s heirs, “Chicago Bridge & Iron isn’t in Chicago, doesn’t build bridges and doesn’t use iron.” CB&I employs ap-proximately 50,000 persons.

CDM SmithEngineering, Construction, Permitting

GlobalAl. Jerozolimskie 123a, 02-017 Warsaw, Poland


CDM Smith provides services in water, environment, transportation, energy and facilities. An engineering and construc-tion firm, CDM Smith is employee-owned with its headquarters in Cambridge, Massachusetts in the U.S.A. In Poland, the company provides environmental, construction and project management services to the oilfield and power sectors.

Champion Technologies Chemicals Global

W. Sam White Building, Peterseat Drive Altens, Aberdeen AB12 3HT, United Kingdom

(+44) 1224-879022 champ-tech.com

Champion Technologies is a specialty chemical company with 3,200 employees in 100 locations in more than 50 countries delivering to upstream and midstream oil and gas markets. Champion Technologies, from its roots in West Texas, provides services in offshore/deepwater, Arctic, heavy oil, oil sands, EOR, refinery, shale gas and oil, and industrial facilities.

Cleantech Poland Commercial due dilligence Europe

ul. Krucza 51/31, 00-022, WarsawPoland


Cleantech Poland LLC is a consultancy for oil and gas who connects clients to grow their business. Cleantech Poland LLC publishes the Shale Gas Investment Guide, a magazine about unconventional onshore European oil and gas. Cleantech Poland LLC provides commercial due dilligence for investors entering the CEE oil and gas markets, and introduces prospective parties to equity investors.

Service directory


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Clear Solutions International

Drilling fluids, Pumps, chemi-cal and minerals for drilling

EuropeUnit B3, Wem Industri-al Estate, Soulton Road, Wem, Shropshire SY4 5SD, United Kingdom

(+44) (0) 1939 235 754 [email protected]

Clear Solutions International Limited is an independent drilling fluid specialist, employing a team of geotechnical specialists and drilling fluids engineers across Europe.

Continuous Control Solutions (CCS)

Control Systems & Engineers Global 11275 Aurora Ave., Des

Moines, IA(+1) 515 278 9655 [email protected]

CCS provides the design, implementation and commissioning of control systems for industrial turbines, compressors and process applications. CCS turbo machinery systems control gas turbines, steam turbines, expanders, compressors, pumps and generators for use in speed control, load control, surge prevention control, among other processes.

Core Laboratories

Reservoir description and management, production enhancement

GlobalHerengracht 424, 1017 BZ Amsterdam, The Netherlands

(+48) 5586 244 641 [email protected]

Core Laboratories provides reservoir description, production enhancement, and reservoir management services. Core Laboratories has 70 offices in 50 countries to increase total recovery from existing fields. Core Laboratories helps clients optimize their reservoir performance and maximize hydrocarbon recovery from their production fields.

DBM ServicesFacilities, project management, HSE, operations and logistics

Polandul. Klimczaka 12B/2802-797 Warsaw, Poland


DBM Services, a private venture named after its two managing partners: Dorota Flint and Marek Cibor, as well as Bill Flint the President, provides facilities management services to Halliburton, and aims to expand across segments including HSE, contract management, procurement, project handover, closeout and testing/commissioning.

dGB Earth Sciences Seismic Analysis India, Texas, Netherlands

Nijverheidstraat 11-2, 7511 JM Enschede, The Netherlands


dGB Earth Sciences is a privately owned company that has been providing seismic interpretation solutions to the oil and gas industry since 1995. dGB operates under a unique freemium business model. They make money by giving their soft-ware away for free, and having clients pay for commercial plug-ins and customer support.

Discovery Drilling Equipment

Drilling Rigs and Equipment Global

Palace House 3 Cathedral Street SE19DE London, UK

(+44) (0)20 7357 6080 [email protected]

Discover Drilling is a private equipment and drilling rig manufacturing company in the oil and gas industry. Headquar-tered in London, with offices and representations in most major oil regions of the world including US, Canada, Middle East, Northern Africa, Russia and South East Asia. Discovery is a new name in the industry, after the company was formed by private investors on the basis of some rig/component building assets purchased in late 2008.

DNV GLConsulting,Risk Management

GlobalUl . Łużycka 6E 81-537 Gdynia, Poland

(+48) 58 511 50 00 dnvgl.com

Stiftelsen Det Norske Veritas (DNV GL) is a classification society organized as a foundation, with the objective of “safe-guarding life, property, and the environment”. The organization’s history goes back to 1864, when the foundation was established in Norway to inspect and evaluate the technical condition of Norwegian merchant vessels.

DOWChemicals, Lubricants,Gelling agents

GlobalDomaniewska 50A 02-672 Warsaw, Poland

(+48) 228 332 222 easterneruope.dow.com

The Dow Chemical Company, Dow, is an American multinational chemical corporation headquartered in Midland, Michigan in the USA. As of 2007, it is the second-largest chemical manufacturer in the world by revenue and as of Febru-ary 2009, the third-largest chemical company in the world by market capitalization with a presence in 160 countries.

Dow Corning Silicone Based Products Global

ul. Marynarska 15, 02-674, Warsaw,Poland


Dow Corning is an American multinational corporation headquartered in Midland, Michigan in the USA. Dow Corning specializes in silicone and silicon-based technology, offering more than 7,000 products and services. Dow Corning is an equally-owned joint venture of Dow Chemical and Corning to produce silicone sealants, adhesives and other products.

DOW Microbial Control

Plastics and chemicals Global

Domaniewska 50A, 02-672 Warsaw, Poland

(+48) 228 540 320

Dow Microbial Control is a provider of biocide and antimicrobial technologies that control & prevent growth of nuisance and dangerous micro-organisms. Products stress process preservation, formulation expertise, dry film fungicides, water treatment chemistry, sanitizing and disinfecting.

Drill-Lab Sp. z o.o. (PGNiG)

Mudlogging equipment and services

CEEUl. Krośnienska 7, 65-958 Zielona Góra, Poland


Drill-Lab has provided geological consulting and mudlogging services to customers since 1990. Custom developed soft-ware for mudlogging delivers real-time parameters during drilling, which are visually and numerically to operators so they know what they’re drilling into. Equipment is supplied by Petron Industries Inc. of Houston Texas.



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Drilltech Drilling equip-ment rental Global

Greenwell Road, East Tullos, Aberdeen, AB12 3AX, United Kingdom

(+44) 122 424 9988 drill-tech.pl

Drilltech Group is a specialist drilling rental tool company whose focus is supporting complex drilling such as ERD, deep-water, horizontal and HP/HT. Drilltech supplies drill strings with high torque capabilities and Spiro-Torq, a casing wear protection and torque reduction device. Achilles certified and ISO standards on equipment.

DTZ Real estate services

Poland, Global

ul. Złota 59, 00-120 Warsaw, Poland


DTZ is a property services company, providing occupiers and investors with end-to-end property solutions, global and local market knowledge, forecasting and trend analysis. In the oil and gas markets, DTZ can help suppliers and logistics companies find commercial space for lease, as DTZ has experts who can help real estate assets throughout the CEE

Duon Energy Trading Polandul. Serdezna 8, Wysogotowo k. Poznania, 62-081 Przeźmierowo, Poland

[email protected] (+48) 61 664 18 50

DUON Capital Group sells and distributes natural gas and trades in electricity. The origins of the Group activities date back to 2000. Currently DUON is one of the leading private providers of natural gas in Poland. Since 2011, it also has been building its position on the market of electricity trading.

EkoTech EnergyWaste manage-ment, treate-ment, effluents

Global Aleje Jerozolimskie 96, 00-807, Warsaw


EkoTech Energy is a privately company partly owned by Climate Equity Solutions. CES is an investment vehicle estab-lished in 2006 for investing in start-up companies. EkoEnergy offers technologies, products, and services aimed at the cleantech, renewable energy and waste management sectors.

Emerson Process Management

ProductionOptimization Global

Horsfield Way, Bredbury, Stockport SK6 2SU, UK

(+44) 870 240 1978

Emerson Process Management has an expertise and capabilities in all aspects of automation and information systems related to the production, transmission, and processing of oil and gas products. With industry and automation expertise, Emerson helps clients optimize their oil and gas operations and ensure the most efficient use of capital and resources.

Energy Specialists Platform (ESP)

General, Independent Consultants

EuropeKlateringerweg 6, 9433 TB Zwiggelte, The Netherlands

(+31) 593 33 13 30 [email protected]

ESP is a team of twenty employees with a technical, economic and commercial background. All employees are experienced in the oil & gas industry or have been working in the gas sales market. Most have international experience, while some are technical specialists and/or function in management. ESP works both upstream and downstream oil and gas.

EnsignDrilling, Well services, Manufacturing

Global 400 - 5th Avenue SW Calgary, Canada (+1) 403 262 1361

Ensign Energy Services Inc. is a land-based driller and well service provider for oil, natural gas and geothermal. Since Ensign’s launch in 1987, the Canada-based company has a drilling fleet characterized by proprietary technology such as Automated Drill Rig (ADR). With headquarters in Calgary, Alberta, Ensign’s shares are listed on TSE.

ERC Equipoise Upstream Analysis

UK, UAE, Libya

6th Floor Stephenson House, 2 Cherry Or-chard Road, Croydon CR0 6BA, London, United Kingdom

(+44) 20 8256 1150 [email protected]

ERC Equipoise is an independent Reservoir Evaluation company, specialising in all areas of upstream analysis. We offer a variety of services from independent reserve audits, to expert witness testimonials, to technical reservoir consulting includ-ing geophysical and geological modeling and reservoir simulation.

EurMidstream Midstream Services Europe

Chaussée de la Hulpe 120, 1000 Brussels Belgium


EurMidstream is in the midstream oil and gas business from early stage production to commercial production. Services are offered during the testing and commercialization phases: testing involves CNG trucking and gas powered electricity generation. Commercialization involves design, construction and operation of facilities e.g. pipelines and infrastructure.

Exalo Drilling S.A. Integrated oilfield services

Africa, Eur., India, Pakistan, Russia

Pl. Staszica 9, 64-920 Piła Poland

(+48) 67 215 13 00 [email protected]

Exalo, a Polish state owned services company, was formed by the merger of five PGNiG Group companies, Exalo Drilling is the largest service company in terms of the size of its drilling and workover fleet in the Polish onshore drilling market. Exalo works predominantly in Central and Eastern Europe, but has a presence in Asia and Africa.

ExproWell testing, wireline inter-vention, produc-tion systems

GlobalMorton Peto Rd, Great Yarmouth, Norfolk, NR31 0LT, United Kingdom

(+44) 1493 600021 exprogroup.com

Expro offers well flow management. They sell products and services that measure, improve, control and process oil and gas from wells. Expro’s areas of service include exploration and appraisal, subsea safety systems, drilling/completions, flow-back/clean-up, production, well integrity and intervention. 40 years, 5,000 employees, across 50 countries.


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Fairstar Heavy Transport

Transport (heavy) Netherlands

Floor 20, 3012 CN, Rotterdam, The Neth-erlands


Fairstar Heavy Transport is a full subsidiary of Dockwise Ltd., a provider of marine heavy transport solutions, specializing in high-value cargoes for the offshore and onshore energy and construction industries. Fairstar owns and operates four of the most modern semi-submersible heavy transport ships in the global fleet: FJORD, FJELL, FORTE and FINESSE.

Fotech solutionsHydraulic Fracturing, Gas lift, Monitoring,

UK, Canada, US

Titan House, Redfields Industrial Estate, Redfields Lane, Church Crookham, Hampshire, GU52 0RD, UK

(+44) 1252 560 570

Fotech Solutions was established in 2008 to develop Distributed Acoustic Sensing (DAS) solutions for the Oil & Gas, pipe-line and security markets. A company founded with Venture Capital funding, Fotech includes Scottish Equity Partners and Energy Ventures among its primary investors, also drawing funds from the Shoabi Group.

Fugro Consulting/Analysis Global

Veurse Achterweg 10, 2264 SG, Leidschen-dam, The Netherlands


Fugro provides geotechnical, survey, subsea and geoscience services. Fugro was founded in the Netherlands in 1962 and is listed on the Amsterdam stock exchange of NYSE Euronext since 1992. Fugro was included in the AEX-index as of September 2008. Fugro employes 14,000 staff in 60 countries.

GE Oil & GasWater treatment, oilfield equip-ment

Global Ul. Emilii Plater 53, 00-113, Warsaw

(+48) 22 520 53 53 [email protected]

GE Oil & Gas provides equipment and services to the oil and gas industry. Products include drilling solutions: both on and offshore, subsea, enhanced oil recovery, unconventionals, LNG, power, refinery, gas storage and pipeline. 43,000 employees in 100 customers, GE is involved in the value chain from extraction to end-use.

GEO-Data GmbHWellsite services, environmental consulting

EuropeCarl-Zeiss-Str. 15, 30827 Garbsen, Germany


Services in mudlogging, wellsite geology, laboratory services, and core analytics partner with GeoKrak Sp z o.o. as part of an expanded suite of services (surface logging, wellsite geology, cutting & gas sampling, and isotope analyt-ics) for the Polish market. GEO-data documents and evaluates drilling data regarding geology, drilling and hydraulic peformance.

Geo-Microbial Technologies (GMT)

Geochemical Analysis Global

56 BoulevardSaint Michel 75006 Paris, France


GMT reduces the risk of drilling dry holes by identifying positive hydrocarbon signatures at the surface. To do this they provide interpretation services. The two techniques they retail are microbial oil survey technique (MOST), where soil samples are tested for hydrocarbons and sorbed soil gas analysis (SSG) testing for the absorption of gas in soils.

GeoDynamics Research Seismic Services Italy

Via Maioliche, 53, Leno Center, Rovereto, Trento, Italy

(+39) 0464 75 00 95 [email protected]

G.D.R. GeoDynamics Research performs low frequency passive seismic spectroscopy to detect and monitor hydrocarbon reservoirs in exploration areas and developed fields based on GeoSpectra IPDS®, which stands for infrasonic passive differ-ential spectroscopy. The evolution of passive seismic spectroscopy at low frequency started in 1995, and the GeoDynamics Research group was founded in 2003 in Italy.

Geofizyka Kraków (PGNiG)

Seismic Services, Well Logging, Data Interpretation

Poland, Austria, Slovakia

Ul. Łukasiewicza 3 31-429 Kraków


Geofizyka Kraków is a geophysical company that performs and analyzes seismic surveys. Geofizyka Kraków is a geo-physical contractor, helping clients to explore hydrocarbon and geothermal. Services include seismic data acquisition, processing, interpretation, well logging and VSP services. State owned with a 50 year history.

Geofizyka Toruń (PGNiG)

Seismic Services, Well Logging, Data Interpretation

United Kingdom,Poland, India, Egypt

Ul. Chrobrego 50, 87-100 ToruńPoland

Tomasz Wilk, (+48) 597 914 [email protected]

Geofizyka Toruń provides geophysical services to the oil and gas exploration industry. The services are focused on conventional oil and gas, shale gas, geothermal deposits, and underground storage. State owned with a 50 year his-tory, having worked in Asia, the Middle East, North Africa, Europe, and Latin America.

Geokrak Sp z o.o. Geological Services CEE

Ul. Mazowiecka 21 30-019 KrakówPoland


Since 1992, providing geological services associated with deep well exploration. It offers a combined suite of services (surface logging, wellsite geology, cutting & gas sampling, and isotope analytics) with their partner firm GeoData GmbH for the Polish market. Servicing the unshore unconventionals market as it develops in Poland.

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Microbial control SolutionSFor the oil and GaS induStry Adding Value to Conventional and Unconventional Oil and Gas Operations

dow Microbial control provides one of the broadest ranges of microbial control solutions in the industry. We offer an unmatched combination of chemistries, delivery forms, technical expertise, reliability of supply and regulatory excellence by matching global capabilities with local needs. effective microbial control allows oil and gas companies to maximize production quantity and quality, combat microbial formation damage and enhance site safety. dow is a leader in innovative, responsible microbial control for the energy market. dow Microbial control brings its industry leading technology to the market through a network of highly-trained oil and Gas Service companies. Solutionism. The more we talk together, the more we solve together.

Dow Microbial Control | www.energymicrobialcontrol.dow.comContact us for more information: [email protected] • +48-22-543-18-00 (phone)

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GeoLog Surface Logging Global, Italy, Netherlands

2 Rubislaw Terrace Aberdeen AB10 1XE, Scotland

(+44) 782 156 9280 geologinternational.com

GEOLOG International B.V. (“GEOLOG”) is an oilfield services company that does surface logging. GEOLOG’s mud logging services are centered on the optimization of the overall drilling times and costs of each well and the acquisition of good data to improve formation evaluation. GEOLOG services national and international oil companies, both onshore and offshore, across more than 35 countries.

Geomage Seismic Process-ing

USA, Eu-rope, Russia

11011 Richmond Ave. Suite 225, Houston, Texas 77042, USA

(+1) 832 7675918 geomage.com

Geomage is a global company that provides seismic imaging technologies and services. Using an approach involving multi-focusing, geological modeling, and reservoir characterization for a diverse range of oil and gas companies. Multifocusing may be the only method able to obtain sufficient data for geological interpretation in areas characterized by complex geol-ogy, high noise or low-fold seismic data.

GL Noble Denton Technical Ser-vice Provider Global Brooktorkai 18, 20457

Hamburg, Germany(+49) 403 614 90 [email protected]

GL Noble Denton is a technical service provider for the oil and gas industry. GL Noble Denton designs, builds, installs and operates oil and gas onshore, maritime and offshore assets to ensure safety, sustainability and superior value. GL Noble Denton are independent advisors providing consulting, design, assurance and project execution services.

Global Geophysical Seismic services Global Ul. Warowna 3/01, 02-654, Warsaw, Poland


Global Geophysical provides seismic data processing, analysis, interpretation, and data integration. Global uses propri-etary and patented technologies that are ideal for processing and analyzing the full offset, rich azimuth, reservoir grade 3D datasets that our crews collect. Global Geophysical can characterize azimuthal anisotropy along with advanced time and depth imaging to extract rock properties and reservoir characteristics.

Ground-Gas Solutions ltd

Monitoring, LaboratoryTesting

Poland,UK

Greenheys, Manchester Science Park, Pencroft Way, Manchester, M15 6JJ, United Kingdom

(+44) 161 232 7465 [email protected]

GGS provides a flexible approach to risk management and environmental monitoring to provide a cost-effective service. GGS utilises continuous ground gas monitoring, and other ‘Best Available Technologies’ (BAT), to acquire robust, au-thoritative data that is designed to provide confidence to regulators, local communities and interested third parties that no environmental damage has occurred.

GSE Environmental Lining Global

Orchideengarten 30 09125 Chemnitz, Germany


GSE retails environmental products such as geotextiles and membranes. Headquartered in Houston, GSE has manufactur-ing facilities in Texas, South Dakota and South Carolina. GSE laboratories are accredited by the Geosynthetic Accredita-tion Institute, and the company has manufacturing facilities in Chile, Germany, Thailand and Egypt. A history of 40 years and a global sales network.

Halliburton Integrated oil-field services Global

53 Ul. Emilii Plater 53, WFC 26th Floor, 00-113, Warsaw, Poland


Halliburton is one of the world’s largest oilfield services companies with operations in 80 countries. It owns hundreds of subsidiaries, affiliates, branches, brands, and divisions and employs over 100,000 people. Halliburton provides a range of integrated oilfield services such as pressure pumping, wireline, coiltubing and wastewater. Some technologies are propri-etary, such as clean stream that uses UV light to treat wastewater.

Hardbanding Solutions

Hardbanding, hard facing tool joints

Global Hardbanding Solutions Europe, Scotland


Postle Industries designs alloys for mining, farming, agriculture, recycling and manufacturing. Hardbanding Solutions, a trade name, moved the company into drill pipe, drill collars and casing/risers. Tuffband and Duraband are two of their proprietary products, and tool joint build-up wires and a non-magnetic hardbanding are two of their strategies for tough-ening up oil pipe in extreme conditions.

HAYS Human Resources Global

ul. Złota 59, 00-120 Warsaw Poland


HAYS has operated in Poland since 2002 and provide professional services in recruitment for the executive busi-ness and industrial companies. HAYS has offices in Warsaw, Tricity (Gdynia), Katowice, Wrocław, Kraków, Lodz and Poznan. Hays Poland can find employees in Accountancy, Finance, Business Services, Construction, Property, Energy among others.

IHS Consultant Services Global Jaśkowa Dolina 15,

Gdansk, Poland(+1) 888 906-8566 ihs.com

IHS is a global information company with expertise in energy, economics, geopolitical risk, sustainability and supply chain management. IHS employs more than 8,000 people in 31 countries. In oil and gas, IHS has grown over the last 50 years through a series of acquisitions, including companies such as Reservoir Visualization and Geological Consulting.

IP Group

Seismic Permiting, Compensation, Human Resources

PolandUl. Elektryczna 2 00-346 WarsawPoland


IP Group entered the market in 2012 to provide human resources, permitting and compensation services on a govern-ment funded seismic contract. The company has expanded into human reources to the financial and insurance markets, alongside the energy markets.

Microbial control SolutionSFor the oil and GaS induStry Adding Value to Conventional and Unconventional Oil and Gas Operations

dow Microbial control provides one of the broadest ranges of microbial control solutions in the industry. We offer an unmatched combination of chemistries, delivery forms, technical expertise, reliability of supply and regulatory excellence by matching global capabilities with local needs. effective microbial control allows oil and gas companies to maximize production quantity and quality, combat microbial formation damage and enhance site safety. dow is a leader in innovative, responsible microbial control for the energy market. dow Microbial control brings its industry leading technology to the market through a network of highly-trained oil and Gas Service companies. Solutionism. The more we talk together, the more we solve together.

Dow Microbial Control | www.energymicrobialcontrol.dow.comContact us for more information: [email protected] • +48-22-543-18-00 (phone)

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INiG (PGNiG)State Sponsored Research

Poland ul. Lubicz 25A, 31-503 Kraków, Poland

(+48) 12 421 00 33 [email protected]

Oil and Gas Institute is one of the oldest research institutes in Poland. Its 60 year history dates from November 29, 1944, when the State Petroleum Office issued a document authorizing the establishment of the Oil Institute in Krosno. In 2008, the minister of economy incorporated the oil and gas research institute.

Inwatec Environmental Consultancy

Poland, Germany

ul. Pastewna 25, 02-954 Warsaw, Poland

(+48) 22 642 95 66 [email protected]

INWATEC Sp. z o.o. was founded in 2003 from the merger of several companies in the field of environmental protection. The company’s activity is directed to small and medium-sized enterprises, and relates to the purification of waste water from a variety of industries, including: food industry.

IONGeophysical Services, Seismic

Europe, North/South America

2105 CityWest Blvd., Suite 400 Houston, TX 77042, USA


ION Geophysical is a seismic services company that provides acquisition equipment, software, planning and seismic processing, and seismic data libraries to the oil & gas industry. The company’s technologies and services are used by E&P operators and seismic acquisition contractors to generate high-resolution images of the subsurface during exploration, exploitation and production operations.

ITS (Parker Drilling)

Oilfield Equipment and Services

GlobalTakelaarsweg 13, 1786 PR Den Helder,The Netherlands


Parker Drilling (NYSE:PKD) provides advanced drilling solutions to the energy industry: drilling services, rental tools and project management, including rig design, construction and operations management. Parker’s international fleet includes 25 land rigs and two barge rigs in strategic markets, and its U.S. fleet includes 13 barge rigs in the U.S. Gulf of Mexico.

KCA DEUTAG DrillingServices Global

Deilmannstrasse 1, 48455 Bad Bentheim, Germany

Juergen Hesselink, Regional Commercial Manager Europe & Kazakhstan, (+49) 5922 72 608

KCA DEUTAG is an international oil and gas services company with headquarters in Aberdeen, United Kingdom. It has approximately 8,000 employees and operates in more than 20 countries. KCA DEUTAG is the merger of KCA Drilling and Deutag AG in 2001. The company has regional offices in Germany, Russia, the Middle East, the Caspian region, North and West Africa, Asia, Norway and across its wider operations. KCA Deutag has 61 land rigs and 39 offshore.

KeruiOilfield Equipment Services

GlobalDomaniewska 44, 02-672 Warsaw, Poland

Magda Szostek [email protected](+48) 784 772 888

Kerui Group is a Chinese company based in the region of second largest Chinese oilfield. It is a fast-developed and comprehensive international enterprise group, which combines research and design of hi-tech petroleum equipment, technical service for oilfield integrated engineering supply of oilfield comprehensive solutions and EPC turnkey projects. Kerui Group joined the Poland Shale Coalition.

Kidova Geological Modeling

North America, Europe, Australia

155 avenue Roger Salengro, F-92370 Chaville, France

(+33) 1 47 09 09 49 [email protected]

Since 1993, KIDOVA specializes in oil & gas, environment (soil, groundwater, air), geothermal and nuclear or hazardous waste disposal sectors: geostatistics, spatial and spatiotemporal data analysis and modeling, characterization and upscal-ing of porous and naturally fractured rock properties, simulation of single and multiphase flows in porous and fractured media, mesh or grid generation and optimization.

Linde Gaz PolskaGas, Egineering, Supply Chain

Poland Al. Jana Pawła II 41a, 31-864 Kraków, Poland

(+48) 12 643 92 00 www.linde.pl

Linde Gaz Polska is the local daughter of an international company specialized in the production and distribution of gas, including the delivery of integrated gas solutions, and the construction of industrial facilities. Employing some 62,000 people in around 100 countries, The Linde Group has a 100 year history and has been in Poland since 1993.

LMKR

Software Support, Consulting, Seismic Processing

Global

16th Floor, The H Dubai Office Tower, One Sheikh Zayed Road, Dubai, U.A.E.

Ali Ramady (+44) 7875 699 695 [email protected]

Founded in 1994, LMKR is a petroleum technology company with a portfolio that includes reservoir-centric interpretation, modeling and analytics software, mobile technology solutions, E&P data services as well as geoscience and information management consulting - all focused towards lowering the risk associated with exploration and production of conventional and unconventional resource plays.

Lokring Technology LLC Technology UK,

Canada, USLittle Orchard, Bar-down Road Stonegate, East Sussex TN5 7EJ

(+44 7802 871688) [email protected]

LOKRING Technology is dedicated to the relentless pursuit of perfection in understanding and satisfying the industry’s fluid and gas connection requirements. Using state-of-the-art computer aided technology, LOKRING designs and produces fluid and gas transfer connectors on the market today


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Maxi Cargo Logistics PolandOs. E. Raczyńskiego 31/13, 62-020 Swarzędz Poland

(+48) 61 610 10 26 [email protected]

Maxi-Cargo company operates in the field of oversize load specialist transport, including flatbed transport. Covering the EU, Maxi-Cargo’s services include oversize load transport, non-standard transport, flatbed transport, large-size transport, transport of machines, transport of construction machinery, and transport of agricultural machines.

Meehan Drilling Drilling UK 40 Kilmorey Street, Newry Co. Down, BT34 2DE, United Kingdom

(+353) 28 3025 2678 [email protected]

Meehan Drilling specializes in drilling and ground engineering services to clients in the public, commercial, domestic and agricultural sectors. Established in 1972, the company offers a wide range of high quality water development, oil & gas drilling, trenchless installations and renewable energy services..

MI-SWACO (Schlumberger)

Drilling Fluids, Completions, Waste Manage-ment

GlobalP.O. Box 42842 Houston, TX 77242USA


M-I SWACO offers systems and technologies for drilling, including drilling fluid systems engineered to improve drilling performance by anticipating fluids-related problems, fluid systems and specialty tools designed to optimize wellbore pro-ductivity, production technology solutions to maximize production rates, and environmental solutions that manage waste volumes generated in both drilling and production operations.

MND Drilling & Services

DrillingServices Global

Velkomoravská 900/405, 696 18 Lužice, Czech Republic

Radovan Jedlicka [email protected] (+420) 518 315 555

MND Drilling & Services is the largest drilling contractor in the Czech Republic, including oil, gas and geothermal exploration/production drilling and well workovers to the drilling and completion of underground gas storage wells. Since 1999, a member of the International Association of Drilling Contractors (IADC).

Multi-chem (Halliburton)

Chemicals, Biocides, Inhibitors

Poland2905 Southwest Bou-levard San Angelo, TX 76904, USA


Oilfield chemcial provider, owned by Halliburton, with a number of commercial, proprietary products, such as Acro-Clear, an acrolein based H2S scavenger and iron sulfide dissolver to remove iron sulfide in production and injection wells. Chemicals help with pipeline integrity by repairing near wellbore damage caused by iron sulfide deposits and previous acid-jobs and can be effective in removing iron sulfide based deposits on pipe or tubular surfaces.

MWH Global Upstream Analysis Global

Severn Trent Water 2800 The Crescent, Birmingham Business Park B37 7YL, United Kingdom

(+44) 131 335 4200

MWH has been serving the oil and gas industry for more than 30 years. We are a provider of design/build, and construction services throughout the upstream, midstream and downstream supply chains.

NADRA Group Geological Services

Eastern Europe

41-49 Agiou Nikolaou, Nimeli Court, Block C, 3rd floor 2408, Nicosia, Cyprus

[email protected]

NADRA GROUP provides a range of exploration works from regional geological evaluation to the field exploration and development, support of oil and gas, metallic and non-metallic minerals and ground water production throughout the life cycle of the field. NADRA GROUP works with production companies and governments of EU, Asia and Africa.National Oilwell Varco Oilfield Services United

StatesDomaniewska 5, 05-800, Warsaw, Poland

(+48) 40 729 639 686 nov.com

National Oilwell Varco (NOV) is an American multinational corporation based in Houston, Texas. NOV is a worldwide provider of equipment and components used in oil and gas drilling and production, oilfield services, and supply chain integration services. NOV conducts operations in over 1,160 locations across six continents.

Navigant Business Advisory Global

5th Floor, Woolgate Exchange, 25 Basinghall Street, London, United Kingdom

(+44) 20 7469 1111 [email protected]

Navigant (NYSE: NCI) is a global expert services firm. Through senior level engagement with clients, Navigant profession-als combine technical expertise in disputes and investigations, economics, financial advisory and management consulting, with business pragmatism in construction, energy, financial services and healthcare industries.

NTS Construction Well Pad Construction Poland

Rynek 26, 37-500 Jarosław Poland

Karol Kolouszek (+48) 16 623 22 51 [email protected]

NTS offers construction services to the oilfield. With a work history in highway construction and spe-cializing in stabilization technologies, earthwork, roadwork, preparatory and finishing work. NTS staff has twenty years experience in implementing civil engineering construction projects.

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NuTechPetrophysical, Geological, Field study, Well Services

Global7702 FM 1960 East, Suite 300, Houston, TX 77346, USA

Chris Hughes(+44) 7785 261308 Stuart Large(+44) 7966 475302 [email protected]

NuTech is a privately-owned global oilfield services company founded in 1998 by oilfield professionals who pioneered Nuclear Magnetic Resonance research and development. Headquartered in Houston, Texas with over 80 employees, NuTech has offices in the US and internationally. NuTech has analyzed 45,000 wells in over 80 countries.

Packers PlusOpen Hole, Multi-stage Completions Equipment

Canada, US, Middle East, Russia

Bow Valley Sq. 2, Suite 2200, 205 - 5th Ave. SW, Calgary, Canada

(+44) 791 715 4740 [email protected]

Packers Plus Energy Services Inc. is a privately held, Calgary-based oilfield service company that provides completion equipment and services. The company specializes in multi-stage fracturing systems for open hole, horizontal wells. Multi-stage fracturing systems are used for hydraulic fracturing, or breaking up tight rock formations to enable release of oil and gas allowing for segmentation of horizontal wells into sections or stages such that they can be fractured.

PangeaGeophysical Geological Data Processing

Europe, Russia, Africa

Aleksandr Solzhenitsyn Street, 27 Moscow, Russia

(+7) 495 912 6503, [email protected]

PANGEA is a leading Russian consultant in the upstream oil & gas industry and a developer of high-technology software systems for geophysical and geological data processing, interpretation and modeling. PANGEA does geophysical surveys, including seismic, gravimag, electromagnetic data acquisition added by geochemical exploration services. Clients include ONGC (India), OMV (Austria), REPSOL (Spain), JOGMEC (Japan), Naftogaz India, GAIL (India).

PBG GeophysicalExploration, Geophysical Services

Poland 76 Jagiellonska 03-301 Warsaw, Poland


PBG LTD. offers services for exploration, engineering & environmental purposes. A Poland based company with 60 years of experience, PBG has completed work in Africa and Asia, executing contracts for oil and gas prodders, government and research agencies and private companies. Services include exploration geophysics, structural and deposit geology, although they do not do seismic exploration.

PanTerra Geoconsultants Seismic Analysis Global

Weversbaan 1-3, 2352 BZ Leiderdorp, The Netherlands


Established in 1988, PanTerra Geoconsultants is a geoscience consultancy group providing services to the upstream oil & gas industry. PanTerra Geoconsultants BV has three operating divisions: integrated subsurface evaluations, labora-tory services, including conventional and special core analysis services, production chemistry, PVT, and geoscience staff secondment.

PECOFacetField Services, Lab services, On-site Testing

Global

Treforest Industrial Estate Pontypridd, Mid Glamorgan South Wales CF37 5YL United Kingdom

(+44) (0) 1443 844141 [email protected]

Over 75 years of industry knowledge, engineering vision, ongoing research, and a network of resources, PECOFacet continually produces contaminant management solutions for an ever changing industrial landscape and an environmentally conscious world.

Perforator GmbHCompletions, Pressure Pumping

GlobalBei dem Gerichte, D-37445 Walkenried, Germany


PERFORATOR is a German manufacturer with 30 years experience. Since 2002, its the core business of the former Schmidt, Kranz mining technique as an independent company. They supply drilling products to international customers. PERFORATOR focuses on thrust boring, trench less pipe, drill pies, tools, DTH, HDD Drilling, injections systems, mining and tunelling.

Petrofac Oilfield Services Global4th Floor, 117 Jermyn Street, London SW1Y 6HH, United Kingdom


Petrofac is an oilfield service company with 30 years experience. They work across the entire spectrum of the oil and gas asset life cycle, on either a stand-alone or integrated basis, under flexible commercial models which are tailored to a customer’s needs. Our teams: design and build oil and gas infrastructure, operate, maintain and manage assets and train personnel.

Prochem S.A. Environmental Protection Poland Ul. Powazkowska 44c

01-77 Warsaw, Poland (+48) 22 326 01 00

PROCHEM is an engineering company, serving clients in the industrial, building construction and environmental protec-tion sectors that was established in 1947. Specialized in general construction, services include technology, architecture, construction and building, road work, mechanical and electrical systems, telecommunications, and various types of large installations.

PwCBusiness Advisory, Auditing, Tax, Legal

GlobalAl. Armii Ludowej 14 00-638 WarsawPoland


Provides oil and gas companies advisory, tax & legal, and auditing services. PwC, a global services company, has been in Poland for 20 years and there are 46 local partners. Having analyzed the proposed mining and geological law, PwC provides up to date information about the regulatory and tax environment for shale operators.



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Risk to ReputationEnterprise Risk and Reputation Management

United Kingdom,Germany,France

Workshop 4, Royal Victoria Patriotic Building John Archer Way, London SW18 3SX, United Kingdom

Tom Vesey [email protected](+44) 20 8877 3620

Risk to Reputation is an enterprise risk consultancy for oil and gas that provides actionable and measurable advice to senior management to hedge against unexpected outcomes. Loss of reputation can lead to the loss of a ‘licence to operate’, with undesirable stakeholders reactions and impacts on business performance.

Rodelta Pumps International Pumps Global

Enschedesestraat 234, 7552 CM Hengelo, The Netherlands

[email protected](+31) 74 2455200

Rodelta Pumps International BV is a manufacturer of pumps, located in Hengelo in the Netherlands. With 60 years developing pumps, product example includes vertically-suspended, single casing volute line-shaft driven pumps whose applications include drinking water, marine, cooling water, fire fighting and whose performance flows up to 1200 m3/h, with heads up to 120 m.l.c.

Salamander GroupWater, Gas Monitoring Technology

UKBooths Hall, Chelford Road, Knutsford, Cheshire WA16 8GS, United Kingdom

(+44) 1565 757 817 [email protected]

Salamander Group identifies, funds and develops technology that meets the growing global demand for continuous asset monitoring that enables improved asset performance and risk management.

Schlumberger Integrated Well Services Global Al Jana Pawła II 25

00-854 Warsaw, Poland(+44) 203 320 4900 [email protected]

Schlumberger, an international oilfield service provider, was founded in 1926 by Conrad and Marcel Schlumberger. Today Schlumberger supplies the petroleum industry with services such as seismic acquisition and processing, formation evaluation, well testing and directional drilling, well cementing and stimulation, artificial lift, well completions, flow assurance and consulting, and software and information management.

Scientific drilling All integrated well services Global

Wellheads Crescent, Wellheads Industrial Estate Aberdeen AB21 7GA, United Kingdom


The company serves a diverse range of customers in all energy sectors. Besides participating in some of the most complex conventional and unconventional oil and gas projects in the world, SDI also has experience in working on geothermal wells and drilling horizontal laterals in coalbed methane reservoirs.

SERAFIM LtdConsultant Services, Reservior Modeling

Europe231 Bangor Road, Holywood, Belfast, BT18 0JQ, United Kingdom

(+44) 28 9042 1106 [email protected]

Serafim does systems, reservoir analysis and financial mathematics. FUTURE, for instance, is a production forecasting and reserves management application and database to generate P10, P50 and P90 scenarios as input to a reserve and resource data base in an efficient and auditable way. Serafim PERIMETER is a range of services offered to asset managers, senior reservoir engineers and technical directors.

SGS Consulting Services Global

38, Calea Serban Voda, Bucharest 40212, Romania

(+40) 21 335 46 83

SGS is an inspection, verification, testing and certification company with 75,000 employees. SGS operates a network of more than 1,500 offices and laboratories around the world and offers services in four categories: inspection, testing, certifi-cation, and verification - with broad experience from health care to energy.

Sibleco EuropeHydraulic Fracturing Sand Producer

GlobalBrookside Hall, Congleton Road, CW11 4TF, CheshireUnited Kingdom

(+44) 7764 959 383 [email protected]

Sibelco is a producer of hydraulic fracturing sands. Building on the experience and resources of our energy division in North America, we’re investing in developing new infrastructure to support the European shale gas industry.

SIMCO Interna-tional Ltd. Technology CEE

Bucuresti-Domnesti 49-50 Street, Clinceni, Bucharest, Romania


Simco International Ltd. is a software company for the oil and gas industry. They program in C++, Microsoft Visual, Borland C++ and Visual Basic, also in Delphi and Java, Oracle and MySQL. Their focus is information technology for pe-troleum engineering. The company’s strategy is to develop expertise in computer applications, designing original software.

Sirius e.s.Drilling Fluids, Completion Fluids, Waste Management

CEEBahnhofplatz 3, A-4600 WelsAustria

(+43) 7242 9396 5660

Sirius e.s. is an Austrian company with German department providing drilling and completion fluids, chemicals, solids control and mud treatment equipment, waste disposal managements as well as associated engineering and measurement services for clients across Europe.

Spirit Innovative Technologies Technology Netherlands

Prof. dr. Dorgelolaan 20, 5613 AM Eind-hoven, The Netherlands

(+31) 40 23 69 445 [email protected]

Spirit automates products and technical processes. Among their products, they focus on liquid and gas flow, supervisory (HMI/SCADA) software, virtual flow computer solution. Proprietary products include Spirit IT, Flow-X®, eXLerate®, SmartCen™, Flow-Xpert™ and more. Spirit IT is a technology partner to PETRONAS.

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SSW Oil & Gas Legal Services Global

Rondo ONZ 1, 00-124 Warsaw, Poland

Piotr Spaczyński, Partner (+48) 22 544 87 00 www.ssw.pl

SSW Law Firm provides legal advice to oil & gas and mining entities. SSW experts represent entrepreneurs in concession proceedings, environmental proceedings, investment proceedings, JV and M&A transactions. They have advised industry leaders during competitive concession proceedings before the Polish authorities, in relation to most natural resources available in Poland. SSW advises trade associations and industry members on the legislative process regarding amendment of the Geological and Mining Act and the Hydrocarbons Act.

TebodinConsultancy, Project Management

Global ul. Taśmowa 7, 02-677 Warsaw, Poland

(+48) 22 334 41 11 [email protected]

Tebodin has been on the Polish market for 20 years. Services include integrated design and complex management for in-dustrial, commercial and infrastructural investments. Post a yearly turnover of some €25 million with 5 branch offices and 300 specialists and a total annual investment value of €500 million. Focus areas include commercial buildings, industrial projects and infrastructure works.

TECH-POMP SERWIS

Water Transfer Heating, Equipment Rental

Polandul. Żegańska 104-713, WarsawPoland

Michal Jelnicki(+48) 604 261 994 [email protected]

TECH-POMP SERWIS provides services for the oil & gas industry. We supply water and other liquid transfer services including pumps for various applications (water, drilling fluid, mud, flowback), piping and accessories. We specialize in high capacity water transfer services to support hydraulic fracturing. We analyze our customers needs to ensure that each project is thoroughly planned and executed, providing best engineering and technological value available.

TenarisLine Pipe, Coiled Tubing, Casing, Connections

Global2200 W. Loop S., Suite 800, Houston, TX 77027, USA

Matias Malik (CEE) [email protected] (+1) 713 767 4400 (USA) tenaris.com

Tenaris provides a full range of quality casing and tubing, drill pipe, premium connections, pipe accessories, sucker rods, and coiled tubing for use in all types of oil and gas drilling and well completion activities. Exceptional services based on expertise of material selection and pipe handling. From a manufacturing center in Romania, Tenaris can serve the Baltic, Lublin and Podlasie basins in Poland. Also a plant in Italy.

TPS - Technitube Röhrenwerke

Seamless Pipes, Welded Pipes, Bending

Germany Julius-Saxler-Str. 7, 54550 Daun, Germany


TPS - Technitube Röhrenwerke is a privately owned company with production and stock facilities for tubes and pipes, oil and gas field tubular products, extended surface tubes and special piping and tubing products and accessories with 35 years experience in the supply of tubular piping products and accessories. Company headquarters is based in Germany.

Trinity Corporate Services (Vistra Group)

Corporate services, HR

Poland, Czech Republic, Romania, Bulgaria

Al. Jerozolimskie 56C, 00-803, Warsaw Poland


Trinity was founded in 2004 by three professionals with broad commercial experience gained in Poland and the Central and Eastern Europe. Trinity has grown to have EUR 14 billion of client assets under our administration. Worked for a number of the foreign E&P companies in Poland and elsewhere doing commercial, tax, advisory, hiring and back office functions.

United Oilfield Services

Drilling, Completions, Seismic Services

Poland, UKAl. Jerozolimskie 123a, 02-017, Warsaw, Poland

Cezary Filipowicz [email protected](+48) 22 1162 300

United Oilfield Services is an oilfield service company providing hydraulic fracturing, modern drilling, and seismic data acquisition services to the European oil and gas industry. Headquartered in Poland, UOS delivers equipment, technical expertise, and local on-site crews to provide customized solutions for customers. UOS is an equity backed startup who launched in 2011 to offer oilfield services.

URS Siting, Permitting, Geotechnical, Construction

EuropeUl. Rejtana 17, 02-516, Warsaw,Poland


URS is an engineering and environmental consulting company throughout the UK and Ireland, Continental Europe, India, the Middle East, the Americas and Asia/Pacific regions. URS does full lifecycle services for clients across a broad range of industry sectors. In oil and gas they are present in upstream, midstream, downstream and petrochemical segments.


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US Steel Tubular Products

Steel Pipe Supply

United States, Europe

10343 Sam Houston Park Drive, Suite 120, Houston Texas 77056 USA

Lynn Tompkins (+1) 281 671 3824

Tubular products for all sectors of oil and gas industry. Extensive experiences in the North American shale markets allows US Stell to provide an unparalleled level of service. US Steel manages their supply chain from a factory and back-office in Slovakia. One of North America’s largest integrated steelmakers and the continent’s largest producer of tubular products.

Vallourec Pipe Tubing France

Ave. du Général Leclerc 27, 92100 France

(+33) 1 49 09 35 00 [email protected]

Vallourec is a manufacturer and retailer of tubular solutions serving the energy markets (oil and gas, power generation). With 22,200 employees and sales of 5.3 billion euros in 2012 – including 78% from outside Europe. Vallourec has integrated manufacturing facilities integrated in more than 20 countries with five research and development facilities worldwide.

Veolia Water Systems Water Treatment Poland

Ul. Balicka 48, 30-149 KrakówPoland

(+48) 12 423 38 66 [email protected]

Veolia Water does water treatment for public authorities, including withdrawal, producing and piping drinking water. Veolia collects, conveys and treats wastewater, in order to recycle it (irrigation, watering, groundwater recharge, etc.) or release the treated water into the environment. Veolia Water conserves water resources upstream and protects release environments and ecosystems downstream.

Weatherford IntegratedWell Services Global

Ul. Krolewska 16, 00-103, WarsawPoland


Weatherford is an international oil and natural gas service company providing products and services for drilling, evaluation, completion, production and intervention of oil and natural gas wells, along with pipeline construction and commissioning. Headquartered in Switzerland, Weatherford currently operates in more than 100 countries and employs 60,000 people.

Weir Oil & Gas Division

Pumping, Proppant, Water Flowlines

GlobalAleja 3 Maja 9, 30-062 Krakow,Poland


Weir Oil & Gas delivers services for customers from capital projects to long term asset management contracts for continu-ing operations both onshore and offshore. Services range from exploration and production through transportation, refin-ing and storage. Weir has a portfolio of high performance pumps and safety critical equipment.

WellynxEngineering and Consultancy Services

EuropeViale G. D’Annunzio, 267 65127 Pescara, Italy

[email protected]

Wellynx is an independent Italian company providing engineering and consultancy services to O&G Companies. Founded in 2011, Wellynx is composed by professionals with sound oilfield experience in various fields such as design and engi-neering, operations and maintenance, quality, health, safety & environment.

WorkstringsDrilling, Pipe Procurement

Global1150 Smede Hwy, Broussard, LA 70518, USA


“Workstrings International is the global leading oilfield equipment rental company providing quality primary drill strings, tubing, landing strings, completion tubulars (CTM, GTM, TTM & Turbotorque™) and handling accessories using in-house engineering and cutting edge technologies. Workstrings International was created following the merger of two companies, Premier Oilfield Rentals and Workstrings LLC.

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Distribution in United Kingdom, Including atTerrapin in Birmingham

Contact us to boost your sales:

- Advertising, commercial partnerships- Sponsored and expanded directory listings- Commercial data on EU-27 oil and gas

Parker Snyder (+48) 517 469 881 [email protected], CEE

Jane Bailey (+44) 1227 [email protected] Kingdom

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Service directory

ExEcutivE Lunch MEEtingOur executive lunch takes place once a month. In October we re-viewed changes in the regulatory regime, which aim to reduce the time it takes to obtain key permits.

B Y G a B o r C h o d k o w s k i - G Y u r i C s

Łukasz Szatkowski of Weil law firm presenting at the lunch


PSC’s October executive lunch of-fered operators and service compa-nies a chance to review changes to geological and mining regulations, which aim to shorten and simplify the permitting process in order to encourage shale gas development. The analysis of the law was prepared by Weil, Gotshal & Manges.

Under the new law, which could come into force on January 1, 2015, all procedures necessary for oil and gas exploration and production will involve a single concession. The time it will take to secure permits should be shortened. For example, an environmental permit will take 45 days to issue, compared to the 9-12 months that it takes currently.

A discussion followed the analysis by Weil, Gotshal & Manges about the fine points of the new regula-tion, concerning, for example, the new scope of joint venture coop-eration agreements. Operators questioned whether or not the re-duced time to permitting was fea-sible, given the government’s previ-ous promises to improve the permit-ting process.

In November, the PSC will ex-hibit for the second time at Terrap-inn’s Shale Gas World Europe con-ference at the Expo XXI in Warsaw. This year, the PSC will provide its members and partners an opportu-nity to network and exhibit, while discussing the future of the industry.

Marek Matraszek CEC Government RelationsPiotr Nowak Celtique EnergieParker Snyder Cleantech PolandVictor Boraks EncanaPawel Poprawa Energy Studies InstituteAnna Srokowska-Okońska Gas Plus InternationalAnna Kaniewska Golder AssociatesMagda Szostek Kerui GroupRichard Cao Kerui GroupStuart Large NuTechDominika Trzaskowska Palomar Natural ResourcesAgnieszka Modlińska Palomar Natural ResourcesGrzegorz Kuś PwCPiotr Spaczyński SSW Law FirmMichał Jelnicki Tech-Pomp SerwisAgnieszka Dyboś WeatherfordEwa Bernatek WeatherfordRoman Rewald Weil, Gotshal & MangesPiotr Fedorowicz Weil, Gotshal & MangesŁukasz Szatkowski Weil, Gotshal & Manges

PSC EXECUTIVE LUNCHO C T O B E R 2 0 1 4

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Richard Cao, Kerui Group, new member Roman Rewald, Weil law firm, presenter Stuart Large, NuTech, newest member

Magda Szostek, member of the board of PSC The executive lunch meeting was attended by 25 senior professionals in the oil and gas industry

Representing Palomar Natural Resources Anna Srokowska-Okońska of Gas Plus Piotr Nowak of Celtique Energy



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PSC PavilionTerrapinn - Shale Gas World Europe November 25 & 26 | Expo XXI Warsaw

114 | Shale Ga S Inve S tm ent GuIde | SUMMER 2014

A leading player in the UK shale gas exploration effort offers a synthetic run-through of why shale gas is needed

A n d r e w Au s t i n , C e O, i G A s

Unlocking Britain’s Energy Potential

w e L L H e A d

UK natUral gas production has come predominantly from the North Sea since the early 1960s,

but this supply has been declining since 2000. This has resulted in Brit-ain being a net importer of gas since 2004 and gas is vital to Britain, it cur-rently provides more than 80% of our heating needs and around 30% of our electricity generation.

In December 2012 the British Geo-logical Survey (BGS) estimated there could be 1,300 trillion cubic feet (TcF) of shale gas resources lying under the North of England in the Bowland Basin.With UK gas con-sumption of around 3TcF per year, and even with a modest 10% recovery rate, these are considerable potential resources.

If exploited fully, UK shale gas could replace a significant portion of gas imports, improving the balance of payments and improving energy security; reducing dependence of energy from countries such as Russia and Qatar. Shale gas could become an important part of the UK’s energy mix. Gas from shale deposits could

significantly decarbonise the econo-my by moving the energy generation mix away from coal towards gas.

The development and expansion of the UK’s onshore oil and gas industry could also provide a significant op-portunity for the economy, creating and supporting jobs in regions of the UK that need it most. It could create

direct jobs such as geologists, and construction workers, but it will also encourage spending that would ben-efit local businesses, including res-taurants, shops and hotels.

The key to the successful develop-ment of the shale gas industry is hav-ing a social licence to operate. We are committed to the environment and the communities in which we operate and we have a long track record of engaging with local residents and we

operate our own Community Fund. We take our environmental respon-

sibilities extremely seriously and work hard to ensure our operations have minimal impact on the sur-rounding ecosystems and neighbours.

Furthermore, IGas works within a stringent regulatory framework in the UK which is widely acknowledged to

be a “gold standard” for the rest of the world.

As we proceed with the exploration of shale there is an opportunity for local and national businesses of all sizes in the supply chain. The recent EY Report “Getting Ready for Shale Gas”, commissioned by United King-dom Onshore Oil and Gas, has high-lighted an enormous opportunity for Britain with potentially £33bn to be spent in the next 15 or so years.

The key to the successful development of the shale gas industry is having

a social licence to operate.

Please visit our booth 32 at Shale Gas Europe 2013 in Warsaw!

BakerCorp Poland Sp. z o.o.

Sierpów 33 | 95-035 Ozorków | Polska

+48 (0) 604 113 028 | [email protected]

www.bakercorp.pl

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KeeP CALMAnd FrAck On

thAcreAge is up FOr grAbs in the uk,

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Shale Gas Investment Guide vol. 8

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