HBW Resources: Ollison Hydraulic Fracturing Report
Below is a summary of publicly available activities currently underway at the federal, state and international levels that could impact the use of hydraulic fracturing for oil and gas extraction. With numerous state legislatures now in session, HBW Resources is monitoring these activities to ensure that responsible and feasible policies based on sound science are advanced.
At a Senate Energy & Natural Resources Committee hearing last month, Secretary Jewell announced an extension of 60 days for the comment period for the proposed hydraulic fracturing rule on federal and Indian lands. The extension will give the public a total of 90 days to comment on the proposed rule. Comments are due by August 23rd.
Comments should be sent to:
Mail: U.S. Department of the Interior, Director (630), Bureau of Land Management, Mail Stop 2134 LM, 1849 C St., NW, Washington, DC 20240, Attention: 1004-AE26.
Personal or messenger delivery: Bureau of Land Management, 20 M Street, SE, Room 2134 LM, Attention: Regulatory Affairs, Washington, DC 20003.
Federal eRulemaking Portal: http://www.regulations.gov Follow the instructions at this Web site. Comments on the information collection requirement
Fax: Office of Management and Budget (OMB), Office of Information and Regulatory Affairs, Desk Officer for the Department of the Interior, fax 202-395-5806.
Electronic mail: email@example.com. Please indicate “Attention: OMB Control Number 1004-0203,” regardless of the method used to submit comments on the information collection burdens. For more information please contact HBW Resources.
State Legislative Update: Please see linked spreadsheet for an updated listing of state legislation dealing with hydraulic fracturing.
California regulators were set to take up offshore fracking after revelations that the practice had quietly occurred off the coast since the late 1990s. The California Coastal Commission added the issue at the last minute to its agenda during its monthly meeting. A recent report by The Associated Press documented at least a dozen instances of hydraulic fracturing in the Santa Barbara Channel, site of a disastrous 1969 oil spill that spurred the modern environmental movement. Federal regulators earlier this year approved a new project that has yet to begin. After the extent of ocean fracking became known, the coastal commission said it planned to ask oil companies proposing new offshore drilling jobs if they will be fracking. The hearing comes after a band of state lawmakers last week called on the federal government to investigate. Offshore fracking has received little attention compared with fracking on land where there have been efforts in various states to ban or limit it.
Sen. Fran Pavley (D, District 27) has spent the summer engaged in negotiations with the governor’s office, energy industry and environmental groups. She’s the prime sponsor of SB 4, a bill that would tighten how California regulates hydraulic fracturing and how much public information drillers would have to provide about their activities. As the bill moves toward an Assembly vote, Pavley and the Brown administration appear to be moving toward a consensus on a key provision that the drilling industry opposes: applying aspects of the new regulations to a technique called “acidizing,” in addition to fracking.
Jon Hydeman, of Lafayette, is challenging the validity of petitions seeking to ask voters whether to ban new oil and gas extraction in Lafayette. Hydeman says the petitions should be tossed because they didn’t include a legally required summary of proposed ballot language. His protest was announced Thursday by the Colorado Oil & Gas Association. The Daily Camera reports it couldn’t immediately reach Lafayette officials or petition supporters for comment Friday. Voters in Loveland and Lafayette also will consider hydraulic fracturing limits. For more information please contact HBW Resources.
City Clerk officials confirmed that Citizens for a Healthy Fort Collins had collected enough valid signatures from registered city voters for a proposal for a five year moratorium on hydraulic fracturing to go before voters. The group needed 3,907 signatures to make the ballot. Chief Deputy Clerk Rita Harris says the clerk’s office certified 4,250 signatures before staff members stopped counting. The Coloradoan reports that the City Council could choose to adopt the proposal at a meeting Aug. 20 or send it to voters. The moratorium would apply to Prospect Energy, the only oil and gas development company working within city limits. Prospect Energy has an operating agreement with the city that includes environmental standards that exceed state regulations. If the moratorium is passed, it would nullify the operating agreement between the city and Prospect Energy and put its operations solely under the less-stringent rules of the Colorado Oil and Gas Conservation Commission.
Colorado regulators looking at new air quality rules for oil and gas drillers may need more time. Colorado’s Air Quality Control Commission was anticipating possible delays at its meeting Thursday. The group is looking at stricter air controls for an industry that is one of Colorado’s top air polluters. Environmental activists have been hoping the commission is stricter on the industry than the agency that regulates spills, the Colorado Oil & Gas Conservation Commission. The Air Quality Control Commission is part of the state health department. The air quality panel is considering new rules including tighter emission controls on storage tanks and expanding pollution control requirements that currently apply in Front Range.
U.S. Rep. Jared Polis (D,CO 2) has amended the complaint he filed last month to state oil and gas officials over a drilling operation that suddenly appeared immediately adjacent to a property in Weld County he has long used as a weekend getaway. Polis, through the holding company Mountain Property Improvement LLC, filed the updated complaint Aug. 6 with the Colorado Oil and Gas Conservation Commission versus Sundance Energy Inc., the Denver-based company doing the work he is contesting. Polis is alleging that the original permit application by Sundance improperly stated the location of its three wells at the southeast corner of Weld County roads 5 and 42, making its application “materially inaccurate.” He’s asking the commission to “sue to prevent any further violations and seek injunctive relief halting all oil and gas development activity” associated with the permits. For more information please contact Us.
Last November, Delaware Gov. Jack A. Markell was putting on the brakes when it came to natural gas development in the Delaware River Basin. Last month, he was extolling the virtues of natural gas at an event to celebrate the conversion of a coal-fired power plant in Dover to natural gas. Markell is one of four governors — plus a federal representative — who are members of the Delaware River Basin Commission, which regulates water use and oversees water quality in the basin. He apparently was the impetus for the DRBC cancelling a meeting to vote on proposed regulations last November. If adopted, the regulations would have led to an end of a drilling moratorium the commission set in 2010. But Markell said he couldn’t support the regs, and the meeting was off. In a letter to the governor, Kathryn Z. Klaber, CEO of the Marcellus Shale Coalition, wrote, “Given these clear benefits — which your state is realizing firsthand, even while Delaware produces no natural gas — we once again encourage you, through your Delaware River Basin Commission position, to call on the Commission to move forward immediately with workable, common-sense regulations.”
Franklin County has become the first Kentucky county to pass a moratorium seeking to block a proposed natural gas liquids pipeline. Moving a step further than a handful of counties that have approved resolutions opposing the pipeline, Franklin’s Fiscal Court approved a year-long emergency moratorium on new applications for roadway crossings for all pipelines carrying hazardous materials. The intent is to give planning and zoning officials time to investigate any threats posed by the proposed Bluegrass Pipeline and any possible changes that may be necessary to local ordinances. For more information please contact HBW Resources.
Sanchez Energy Corporation announced it has entered into agreements pursuant to which and upon closing Sanchez Energy would acquire approximately 40,000 net undeveloped acres in the core of the Tuscaloosa Marine Shale trend for cash and shares of its common stock plus an initial 3 well drilling carry.
Gov. Andrew Cuomo debated the pros and cons of hydraulic fracturing, but he said the state has yet to reach a conclusion on the controversial drilling practice, which has been on hold for nearly five years. “We understand the economic benefits. What are the health and environmental consequences? And that’s what we are studying,” Cuomo said on “The Capitol Pressroom,” a public radio show. “And that’s not a little question, it’s a big question and it’s a controversial question. And we’re trying to substitute information for emotion.” Hydraulic fracking has been on hold in New York since 2008 as state regulators review the potential environmental impacts of the drilling technique. The prime spot for hydraulic fracturing would be in the Southern Tier, which sits above the gas-rich Marcellus Shale. Cuomo has been waiting on a review by the state Department of Health, but the department’s research has dragged on for months, with no details on when it would be finished or what is currently being studied. In February, Health Commissioner Nirav Shah said he would complete his review in the “next few weeks.”
New York has joined the growing list of states seeking to prop up the market for natural gas vehicles. Gov. Andrew Cuomo (D) unveiled the $19 million New York Truck Voucher Incentive Program, which includes money for battery-electric commercial trucks as well as compressed natural gas vehicles. The truck voucher program will include two voucher funds: $9 million for battery-electric truck vouchers offered in 30 counties around the state that did not meet federal clean air standards, primarily downstate New York, the Capital Region and Western New York; and a $10 million alternative fuels voucher fund for New York City, which also includes compressed natural gas, hybrid-electric vehicles and retrofitting diesel engines with emission control devices. For more information please contact Us.
Banning hydraulic fracturing and shale gas drilling in the Town of Chautauqua was recommended by a resident who appeared at the board’s meeting Monday. Audrey Dowling, a town resident, used the public comment part of the session to remind board members of a state appellate court ruling in May upholding local government prohibition of so-called hydro-fracking and shale gas drilling within their boundaries.
Abraxas Petroleum Corp. has closed its $38.3 million sale of non-operated working interests in North Dakota’s Bakken Shale to Houston’s Natural Resource Partners L.P. The sale has an effective date of March 1, 2013. The deal consists of 13,500 net acres with an estimated average working interest of 11 percent. It includes 134 producing wells and interests in 18 wells in various stages of development.
The technology is now available to allow oil companies to recycle water used for hydraulic fracturing in North Dakota, industry representatives said. But implementing that technology in the Bakken will take time as operators adjust to the new methods and regulators respond with new permitting rules. Oil service companies Halliburton and Nuverra Environmental Services held an event in Watford City on Tuesday for industry leaders to learn more about a new system that could reduce the amount of fresh water being used for oil production in North Dakota. The oil industry used about 5.5 billion gallons of fresh water in North Dakota in 2012, according to the North Dakota State Water Commission. For more information please contact Us.
EV Energy Partners said that it signed a deal to divest land in the Utica Shale of Ohio for $284 million to an undisclosed buyer. The sale includes 22,535 acres in Guernsey, Harrison and Noble counties. Of that total, EVEP is selling 4,345 acres for approximately $56 million, net to its ownership interest. EVEP will retain its overriding royalty interests in these acres. The transaction is expected to close by the end of the third quarter and is subject to customary closing conditions and purchase price adjustments.
Members of the Youngstown Community Bill of Rights Committee, spearheading an anti-fracking charter amendment, say they have more than enough signatures to get the issue on the Nov. 5 ballot. The group needs petitions with at least 1,562 valid signatures by Sept. 6. In an email, the group wrote that it surpassed its goal. City voters in May rejected a similar charter amendment 56.85 percent to 43.15 percent. For more information please contact HBW Resources.
Shale gas drillers in Pennsylvania are facing new rules that will, for the first time, limit noxious emissions, including nitrogen oxides, volatile organic compounds and hazardous air pollutants. The new state rules were published Saturday, August 8 in the Pennsylvania Bulletin and take effect immediately. According to the rules, shale gas drillers will be required to either get an air quality plan approved by the state Department of Environmental Protection before drilling a well, or implement practices and emission controls more stringent than federal requirements that took effect in April 2012. The new rules end the 1996 blanket exemption granted unconventional shale gas wells from pollution control requirements.
The Armstrong School District plans to lease its oil and gas rights at Lenape Elementary School in Manor Township to two drilling companies. The school board approved a two-year lease with Kittanning-based Snyder Brothers, Inc., and Kittanning-based MDS Energy to drill for Marcellus shale gas on a 49.36-acre parcel at Lenape Elementary School, and a 43.51-acre parcel at Lenape Technical School. The board approved the lease in an 8-0 vote. The two companies plan to join forces, in hopes of maximizing production on the district’s land. The companies will begin applying for permits through the state Department of Environmental Protection within the next couple of weeks, but construction and drilling may not begin until next summer. In addition to the Lenape Elementary and Lenape Technical schools, Close said the district holds a lease with Snyder Brothers at the West Hills Primary and Intermediate schools campus.
Sen. Bob Casey (D, PA) who kicked off a statewide economic development tour by visiting the Alberts Co. headquarters just outside Williamsport. In front of the Spray Solutions warehouse, Casey held a press conference to unveil a bill that aims to pump federal job-training dollars into Pennsylvania’s natural gas industry. The federal Workforce Investment Act, enacted in 1998 and now up for reauthorization, enables the U.S. Department of Labor to dole out grants to local workforce investment boards to provide employers with subsidized job training. Casey’s proposed legislation, called the Marcellus Shale On-the-Job Training Act, would earmark some of those funds to companies involved in the exploration, production and transportation of natural gas extracted from the Marcellus Shale.
Pennsylvania residents petitioned the Environmental Protection Agency to reopen an investigation into water quality in Dimock, after publication of an internal agency analysis that linked gas drilling to methane leaks. In 2010, state regulators said drilling by Cabot Oil & Gas Corp. near Dimock had contaminated local wells, a finding disputed by the company. The subsequent EPA investigation, concluded last year, found the water posed no health risks to town residents.
Groups such as Marcellus Protest and South Hills Area Against Dangerous Drilling say they plan to show up in force to the Allegheny County Council’s Aug. 20 meeting, the first after its summer recess marshaling their forces against drilling under county parks. Drilling for natural gas in Marcellus Shale under parks likely won’t be on the agenda, but opponents plan to air the issue in front of council. For more information please contact Us.
Researchers at the University of Texas at San Antonio (UTSA) and Southwest Research Institute (SwRI) are investing $200,000 in new research to develop a low-cost method to treat flow-back water following hydraulic fracturing. Over the next year, the researchers will use an inexpensive charcoal product called biochar for the water treatment method. It will be tested on water samples from the Eagle Ford Shale. For more information please contact HBW Resources.
Marathon Oil Corp. is making about 80,000 barrels of oil equivalent per day in the Eagle Ford, up 11 percent since the beginning of the year. About 62 percent of that production was crude oil or condensate, 17 percent was natural gas liquids and 21 percent was natural gas, according to the company’s second-quarter results and a recent call with analysts. In the second quarter, Marathon drilled 82 new Eagle Ford wells and brought 70 other wells to market. The company is mostly pad drilling, putting multiple wells on each pad, which it said is helping increase speed, efficiency and costs in the region.
Antero Resources Inc., an energy company backed by New York private-equity firms, plans to spend more than half a billion dollars on a pipeline. But the 80 miles of pipe won’t transport oil or gas: They will carry water from the Ohio River to fracking sites in West Virginia and Ohio. The proposed pipeline would slash the company’s water costs by two-thirds, or about $600,000 per well, Chance Richie, a water consultant to Antero, said at an industry conference in March. The trucks that now deliver most of that water are a “very, very large expense,” he said. They also contribute to congested roadways in some rural areas. In a permit filed with the Army Corps of Engineers, which regulates water withdrawals from the Ohio River, Antero said it plans to build an intake pipe capable of sucking up 3,360 gallons of river water a minute—or about 4.8 million gallons a day. Pumps would send the water through a 20-inch steel pipe eastward where it would be collected in several large pools before it was piped to drilling pads. The Army Corps has approved part of Antero’s plan, and a decision on the remainder is pending.
A board charged with protecting the Wisconsin River must decide this month whether a frac sand mine can be placed within its jurisdiction — a move that some board members feel is contrary to their mission. The Wisconsin River is protected by state law for about 90 meandering miles from just northwest of Madison in Prairie Du Sac to its connection with the Mississippi River. A Lower Wisconsin State Riverway Board member estimated $30 million has been spent since 1989 to acquire protected land with the purpose of maintaining the river’s natural landscape. Now, an Iowa company wants to establish a mine in part of the riverway to extract sand for hydraulic fracturing. Two members of the board in a memo said a frac sand mine had “the potential of undoing all the effort that has gone into establishing the Lower Wisconsin State Riverway.” The problem for mine opponents, however, is a provision in state law some call a “loophole” that will likely require the permit’s approval. When the protected area was created in 1989, mining and quarrying were forbidden. In the 1990s, the law was amended to say a person proposing a non-metallic mine, which includes frac sand mines, “shall” be granted a permit if certain standards were met. The proposed site of the mine is in Bridgeport, a few miles from the Iowa border. The Town Board unanimously provided the final piece of local approval in March. The mining company, Iowa-based Pattison Sand Co., was also given the necessary permits by the state Department of Natural Resources. The only approval Pattison Sand needs to mine in full is from the riverway board, according to Cupp. For more information please contact Us.
The U.S. is not only far ahead of the rest of the world when it comes to the exploration and production of shale oil and gas according to KPMG’s “Shale Development: Global Update.” The report said that the U.S. will remain the best place in the world for investment for a significant time to come. KPMG said that it believes the U.S. could be exporting between 6.5 Bcf and 8.5 Bcf of LNG by the end of this decade, which would play a significant role in boosting the prospects of dry gas plays. When looking at other potential shale oil and gas producers around the world, KPMG mentioned China, Argentina, Australia, Indonesia and the United Kingdom as countries that could eventually take advantage of the shale revolution. Even for better-prepared nations such as China and Argentina, however, that day is a long way off, as the U.S. has benefited from a number of unique advantages.
From 2007 to 2012, private sector employment increased by 1 million jobs, or about 1 percent. During the same period, the oil and gas sector, which accounted for about 0.5 percent of total private employment, grew by 162,000 jobs, a 40 percent increase, EIA calculated from Bureau of Labor Statistics data. According to EIA numbers, monthly crude oil production increased 39 percent between January 2007 and December 2012. Monthly natural gas extraction rose by 25 percent over that period. The agency’s short-term energy outlook predicts continued production increases through 2014. Of the three main subcomponents of the oil and gas industry – drilling, extraction and support – support grew by about 55 percent from 184,000 workers to 286,000 employees between 2007 and 2012, the analysis shows. Support jobs provide ancillary functions like casing work and well construction. Extraction and drilling, the other two industry subcomponents identified in the EIA report, grew by about 38 percent and 7 percent, respectively. By the end of 2012, the extraction business employed about 193,000 workers, and drillers were putting about 90,000 people to work. For more information please contact HBW Resources.
Fossil fuel production on U.S. federal lands took another dip during fiscal year 2012, even as energy production nationwide soared to a record high, according to the U.S. Energy Information Administration. During fiscal year 2012 — which ended last Sept. 30 and is the most recent period for which the agency’s data is available– federal lands produced 17.1 quadrillion British thermal units of fossil fuel energy, the lowest level in at least a decade. That was a 3.7 percent decline from the year before. In addition to a drop in coal production, federal-land fossil fuel output suffered from continuing declines in oil and natural gas production offshore, including the Gulf of Mexico. For most of the past decade, a third of the nation’s fossil fuel production has come from federal lands. But that share has fallen during the national shale boom, which has occurred largely on privately owned property. During fiscal year 2012, less than 28 percent of domestic fossil fuel production was on federal land. For more information please contact Us.
EPA Administrator Gina McCarthy delivered a speech in Boulder focusing on reducing greenhouse gas emissions and creating jobs in the energy sector, highlighting the importance of natural gas in this effort. From her remarks, “Responsible development of natural gas is an important part of our work to curb climate change and support a robust clean energy market at home. It also has huge potential to help power our factories and our vehicles, while at the same time cutting our dependence on foreign oil.”
Marcellus Shale natural gas production is rising even faster this year than energy experts had predicted, and that’s having a national impact on energy. Bentek, a Colorado company that analyzes energy trends, said 2013 production in Pennsylvania and West Virginia is up about 50 percent compared with last year. Figures for the pipelines that take gas out of the Marcellus show that in the first six months of the year, Pennsylvania produced about 1.5 trillion cubic feet of gas, with projections for a year-end total of about 3.2 trillion cubic feet. That yearly number translates into the equivalent of about 550 million barrels of oil. For more information please contact HBW Resources.
Natural gas production continues to be strong in the U.S. as firms tap shale plays that are largely on private lands, even as production on federal lands has fallen, an Energy Information Administration official said. EIA Deputy Administrator Howard Gruenspecht said that with natural gas prices remaining low, there hasn’t been much incentive to produce it offshore in the U.S. So most of the growth in natural gas production has been focused onshore. Since 2003, he said U.S. natural gas production has increased on private lands, while it has declined on federal lands.
The boom in natural gas production in the U.S. has ignited a revolution in the auto sector that could reshape the way Americans fuel their vehicles. Technological advancements in hydraulic fracturing, or “fracking,” and horizontal drilling have led to a surge in natural gas production. In fact, production is up 25% from 2007 to a record in 2012, according to the U.S. Energy Information Administration. The heavy-duty truck industry is on the verge of making the switch from gasoline to natural gas now that companies have developed the necessary 12-liter engines, said Andrew Littlefair, CEO of Clean Energy Fuels, the largest provider of natural gas fuel for transportation in North America.
Eastern Europe could become the next hotbed of shale gas exploration as oil and gas moguls, such as Chevron Corp., chase opportunities in countries that want to establish their energy independence from Russia and rebuild their economies. The U.S. Energy Information Administration (EIA) estimates the combined gas reserves in Romania, Bulgaria and Hungary could equal more than 535-billion cubic meters of gas. This would be enough to restock Romania’s consumption for almost 40 years, according to the agency, as Romania’s average annual consumption totals about 14-billion cubic meters.
Greek Cyprus, Greece and Israel signed a deal to cooperate over energy and aiming at securing Europe’s energy supply. A memorandum of understanding was signed by Greek Cypriot Energy Minister George Lakkotrypis, his Greek counterpart Yannis Maniatis and Israel’s Silvan Shalom. A statement said the three countries welcomed joint projects in the energy sector to “enhance the security of energy supply, sustainable development and cooperation among countries in the region.” It said they also supported the privately initiated EuroAsia Interconnector project, which aims to link the three countries with an electricity cable.
A group of energy companies that discovered large amounts of natural gas off Israel’s Mediterranean coast said they were in talks to export the gas to Europe via a pipeline to Turkey. A spokesman for Delek Group, the parent company for Avner and for Delek Drilling, said the group – led by Noble Energy – was already in advanced talks with companies in Turkey, Jordan, Egypt and the Palestinian Authority about buying Israeli gas and building pipelines. The talks show that the gas project is moving ahead, with prospects of eventually boosting Israel’s export revenue and economic growth. They also indicate reduced tensions between Israel and Turkey. Recoverable gas in the Levant Basin, which lies largely in Israeli and Cypriot waters in the eastern Mediterranean, hold some 3.5 trillion cubic meters of gas, the US Geological Survey has estimated. For more information please contact HBW Resources.
Armour Energy’s Egilabria 2DW1 lateral gas appraisal well has reached a total depth at 2102 meters and casing was successfully cemented in place to appraise the lateral section of the highly prospective Lawn Shale. This interval correlated well with projections from the Egilabria 1 and 2 vertical wells. The Lawn Shale Formation contains a prospective resource of 22.5 Tcf of high quality gas, which could potentially feed 2 trains of LNG production. The fractured and brecciated dolomitic section at the base of the Lawn Shale indicated flows and shows on Egilabria 2 vertical well and maintained background gas on Egilabria 1 after drilling through the Lawn Shale. Egilabria 2DW1 is testing the Lawn Shale, as well as the fractured and brecciated dolomitic section at the base of the Lawn Shale and fractured gas bearing zones above the shale. Armour has said it considers the results to be very encouraging, and is readying contractors to perform an eight stage hydraulic stimulation treatment within these highly prospective intervals over the next month.
Brazilian oil and natural gas producer HRT Participações SA said that liquefied natural gas is its preferred solution to move gas from isolated Amazon wells to paying customers. HRT and its partner in the company’s Brazilian operations, Russia’s NK Rosneft’ OAO, have signed letters of intent with Brazil’s state-run oil company Petroleo Brasileiro SA, or Petrobras, to cooperate on projects to “monetize,” or sell gas from the remote and sparsely populated region. For more information please contact Us.
ConocoPhillips is selling its stake in a Canadian oil sands project to Exxon Mobil Corp and Imperial Oil Ltd for about $720 million as it focuses on its U.S. shale oil and natural gas operations. The all-cash deal involves the sale of 226,000 acres of undeveloped land, roughly 93 miles (150 kilometers) south of Fort McMurray, Alberta, to Exxon Mobil’s Canadian unit and Imperial, which is 70 percent controlled by Exxon. After the deal closes, Exxon Canada will own a 72.5 percent interest in the land, known as the Clyden oil sands leasehold, with Imperial controlling the rest. For more information please contact Us.
Canada has suspended the operating license of the rail firm involved in last month’s Quebec fuel train disaster, officials say. The Canadian Transportation Agency (CTA) says the company did not have enough third-party liability insurance. The CTA’s order covers both Montreal, Maine and Atlantic Railway (MMA) and its Canadian subsidiary. The license suspension becomes effective on 20 August. The CTA said MMA did not have adequate third-party liability insurance, one of the requirements to operate Canada.
Oil and gas exploration and production firm Apache Corp. said that it is selling some Canadian oil and gas producing assets to Ember Resources for $214 million. The Canadian assets are in the Nevis, North Grant Lands and South Grant Lands areas of western Alberta. They include 621,000 acres and more than 2,700 wells that had average net production of 67 million cubic feet of gas and 237 barrels of liquid hydrocarbons per day during the second quarter.
India will take at least three months more to draw up a policy framework for shale gas exploration that would allow both private domestic and foreign firms to begin drilling for the fuel, two oil ministry sources said. India has a chronic power supply shortage and yet many gas-fired electricity plants stand idle as the country lacks the fuel to supply them, or the infrastructure and cash for expensive imports. Shale gas supplies could eventually help meet demand, but India has been slow to open up the sector. The country could be sitting on as much as 96 trillion cubic feet (tcf) of recoverable shale gas reserves, the U.S. Energy Information Administration estimates, equivalent to around 26 years of the country’s gas demand. India’s cabinet will soon approve a policy for shale gas exploration, initially allowing state oil companies holding India’s oldest contracts to drill for shale. For more information please contact HBW Resources.
Mexico moved to end the country’s 75-year-old monopoly on oil and gas production, potentially opening up some of the world’s biggest remaining untapped oil reserves to private companies and setting the stage for a new energy boom on the U.S. doorstep. The government unveiled a bill to change the constitution to let it partner with private companies to find and produce oil and gas in a country that is the third biggest supplier of crude to the U.S. and has the world’s fourth biggest reserves of shale gas. State oil monopoly Petróleos Mexicanos, the sole producer of oil and gas in Mexico, now pays a fee to service companies to do everything from exploration to drill wells. But that model has failed to attract interest from major oil companies and led oil production here to plummet. Major oil companies that have struggled to find big new oil fields are likely to find appeal in the relatively familiar geology and operating conditions of Mexico versus the Arctic or some politically unstable regions of Africa and the Middle East, particularly those active on the U.S. side of the Gulf of Mexico.
Romania-based company Petrom has announced that it is not planning to explore shale gas potential until after its current ten-year plan. It has been suggested that the firm’s more immediate priority is its 50% stake in the Neptun offshire block in the Black Sea. ExxonMobil has struck gas at this facility with its maiden deep-water prove.
Russian oil producer Gazprom Neft has approved the continued study of shale oil reserves at the Bazheno-Abalaksky complex of the Palyanovskaya zone at the Krasnoleninskoye field, which is being developed by Gazpromneft-Khantos. The project’s new phase involves drilling four inclined wells to a depth of 2,700-2,800 meters over the next year. Drilling will start by the end of 2013 and be completed by summer 2014. Gazprom Neft completed tests on the first appraisal well drilled in the Palyanovskaya zone to study the Bazheno-Abalaksky stratum in spring 2013. The well produced an oil flow at a rate of 80 cubic meters per day. Based on these results Gazprom Neft was able to draw up a conceptual model of the field and reserves in the Bazheno-Abalaksky complex as well as plan further development of the site and define locations for the new appraisal and production wells. These will all be relatively close to the existing well. For more information please contact Us.
Halliburton Co. has signed an agreement with Gazprom Neft for the company to use Halliburton’s operational efficiency in its Russian oil fields. Gazprom Neft said in a statement the company’s goal is to increase its hydrocarbon production to 100 million tons of oil equivalent by 2020. Gazprom Neft expects more than half of its oil will be produced using innovative technologies to enhance development efficiency in mature fields and to implement new projects that involve technological challenges. The companies will collaborate on technological solutions for hard-to-recover reserves, unconventional resources, deep water and other projects. Gazprom Neft will deliver data on implementation to Halliburton, and the Houston company will, in turn, offer technological solutions.
Prime Minister David Cameron has written an editorial, “We cannot afford to miss out on shale gas” for The Telegraph where he stresses on the importance of exploring and extracting the country’s vast shale gas reserves in order to drive down the price of gas, create as many as 74,000 jobs and bring money to local communities. For more information please contact HBW Resources.
David Cameron’s plans to kick-start shale gas fracking faced a fresh setback after the Environmental Agency (EA) said energy companies could face a six month wait to secure permits despite a government pledge to cut the process to less than a fortnight. EA said the “current level of public interest” in fracking meant that the permitting process was likely to be extended to allow for more consultation. In June, the Treasury pledged the government would take a series of measures “designed to kick start the shale gas industry in the UK” including plans for the EA to “significantly reduce the time it takes to obtain environmental permits for exploration”. It said the EA would ensure shale gas permits which currently take a varying length of time would be issued within a “standard 13 week period” by September and then “within 1-2 weeks” by February.
For additional information, please contact Bo Ollison with HBW Resources. His contact information is below.
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