follow us Twitter Facebook
<< Back to News

What are drilling costs in euros?

March 08, 2010
TOPICS: Natural gas
After watching American energy companies start a shale gas revolution, Europe's biggest oil companies are combining the countryside in hopes of tapping gas reservoirs previously seen as untouchable.

From the Financial Times:

The newly accessible US shale deposits are so big that executives now believe the country has enough gas to last it for a century. This extra supply and the US’s new found self-sufficiency has created a worldwide gas glut that has driven down prices.

It is a remarkable turnround. Just three years ago, most US energy executives were working out how the US could import enough gas from places as far away as Nigeria, Russia and Qatar, while competing with the demands from China and other energy-hungry developing countries.

For companies such as ExxonMobil, Royal Dutch Shell and BP, tapping Europe’s shale gas deposits is a way to catch up with what they missed out on in the US.
“For a long time the big boys thought the US shale gas resource was not big enough, the wells were too small,” says Vello Kuuskraa, president of Advanced Resources International, a consultant on unconventional oil and gas resources. These are loosely defined as those that need more energy, money and different technology to develop.

While smaller American independents spent the past decade figuring out a way to tease gas from seemingly impermeable shale, the world’s largest oil companies focused their multi-billion dollar exploration budgets on trying to find the world’s next super-sized oil field.

As the big companies’ exploration attempts failed to turn up any giant finds, they ended up competing against each other for the rights to the messy and environmentally unfriendly development of Canada’s oil sands.

High oil prices made their transition to the oil sands easier because profit margins widened and more of it became commercial. But the global recession put an abrupt stop to seven years of rising oil prices. Oil now trades at about $70 a barrel, less than half the $147 it reached in mid-2008, making developments in Canada less attractive.
<< Back to news