Is Europe Next for a Shale Natural Gas Boom?

From Oil Price

By Daniel J. Graeber

Chevron (NYSE: CVX) and Royal Dutch Shell (NYSE: RDS.A) are getting an early start on shale exploration campaigns in eastern European countries. With the United States fast emerging as a shale natural gas leader, European economies eager to bolster their own energy independence are working to follow suit. Shell plans to spend more than $400 million to tap into Ukrainian shale, while Chevron has similar ambitions in eastern Romania. While regional shale gas production isn’t going to match that seen in the United States, it’s expected to eventually weaken the Russian grip on the region’s energy sector.

The U.S. Energy Department’s Energy Information Administration estimates that, together, Bulgaria, Hungary and Romania may hold many trillion cubic feet of shale natural gas. That was enough to give U.S. supermajor Chevron the confidence to move ahead with an exploration campaign there. The company began taking on shale concessions in 2010 and has since announced plans to start exploration. If EIA estimates are close to accurate, there may be enough shale gas in Romania to cover its energy needs for the next 40 years. The company, however, still needs environmental permits to move forward with its campaign.

Royal Dutch Shell, meanwhile, announced in January it was spending $10 billion to develop the shale potential in neighboring Ukraine. Chief Executive Officer Peter Voser said on the sidelines of last month’s economic summit in Davos, Switzerland, that his company sees “a lot of potential” in Ukraine, where the EIA puts the reserve estimate for shale natural gas at 42 trillion cubic feet.

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