Shale Gas Investment Guide vol. 8

shale gas investment guide

Shale Gas

investment

Guide

winter 2014

KEEP CALM And Frack On

winter 2014

th

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CM

MJ

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CMJ

N

4 | Shale Gas Investment guide | Winter 2013

Contents

24

Keep Calm and Frack On

6 | Shale Gas Investment guide | winter 2014

CONTENTS

p/13

INDICATORS

p/20

TRENDING

p/2 4

EU Market Update

52

UK FOCUS • 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/50 Private Equity in Short Supply

Global Update

64

p/54 PGNiG: Down to Earth p/56 Strategic Water p/6 4 Global Update: Enemies of New Order p/68

Best technologies

Poland Shale Coalition

p/70

Small-scale LNG

p/72

Release Gas, trap CO2

p/74

WHO’S WHO: EU

110

p/94

SERVICES DIRECTORY

p/114 Wellhead: Andrew Austin, IGas www.cleantechpoland.com

|7

opinion

By wojciech kość

Shifting Paradigm 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.

With an easier permitting regime and landowners 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 produce more energy at home t han it wi l l need, for the first time in close to 60 years.

The European operators look at the US as a country of reference and never miss an opportunity to say what they would give for the EU to let go of procedures and the traditional government, rather than private, ownership of mineral resources. But they are looking at the US, which is after a long period of development, 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 application of knowledge about unconventionals

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

8 | Shale Gas Investment guide | winter 2014

exploration amassed in America. The disappointment 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 finetune 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 invasion of Ukraine.

Given the EU’s most recent climate and energy 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 energy imports, while Europe marches toward decarbonization of its economy. 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.

Shale Gas

masthead

investment

Guide

EDITOR IN CHIEF Wojciech Kos´c´

PUBLISHER Parker Snyder

ART DIRECTOR Łukasz Mazurek

concept design Paige Weir

PRINCIPAL ANALYST ´ Piotr WdowiNski

COMMUNICATIONS Gabor Chodkowski-Gyurics

COPY EDITORS Marynia Kruk, Jo Harper

HIRED! MANAGING EDITOR Jan Wypijewski

HIRED! WRITERS

´ Piotr Lewandowski, Radek Budzowski, Hubert Karon, Edyta Stopyra, Gordon Wasilewski, Dawid Wierzbicki

WRITERS

Paul Garrett 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 kowalczyk, ian lewis (london), Sara Lichwa (London), Zuzanna marchant (london), Nikolay Marchenko (Sofia), Jerin Mathew (Bangalore), Wu Ming (Beijing), Nicholas Newman (London), Greg Penfold (Cape Town), Sonja van Renssen (Brussels), Claudia Perez Rivas (Texas), Graham Stack (Kiev), Dominic Swire (Beijing), Alice Trudelle (Quebec), Gordon Wasilewski, Jude Webber (Mexico City)

EXPERT CONTRIBUTORS

´ olga andrienko-bentz, Jacek Ciborski, Piotr dobrowolski, Florence Geny, Grzegorz Kus, . ´ Drew Leifheit, Eva-Maria Maciazek, Paweł Poprawa, elena revutskaya, Wojciech SłowiNski

‘

EDITORIAL CONTACT

Wojciech Kos´c´, Wojciech@cleantechpoland.com, (+48) 602 458 099

ADVERTISING CONTACT Western Europe, Scandinavia: Jane Bailey, Jane@cleantechpoland.com, (+44) 750 347 1415 Middle East, Central & Eastern Europe: Parker Snyder, Parker@cleantechpoland.com, (+48) 517 469 881

PUBLICATION PARTNERS CH RobinsoN, DTZ, HAYS, NuTech, PwC, RISK TO REPUTATION, SSW

GUEST COLUMNISTS Frank MaIo, Kathryn Z. Klaber, Kamlesh Parmar, Andrew Austin

KEY PHOTOGRAPHY

´ Szymon Szczes´niak Lou Denim, KM Ratschka, Konrad Sieron,

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PRINTER Drukarnia Beltrani, www.drukarniabeltrani.pl, Kraków,

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SUBSCRIPTION The 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 info@cleantechpoland.com.

PUBLISHER Cleantech Poland LLC, Ul. Krucza 51/31, 00-022 Warsaw, Poland

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|9

The 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

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

Commercial Partners To become a partner for the magazine, please contact the publisher

CH ROBINSON C.H. Robinson is one of the world’s largest third party logistics (3PL) providers offering multimodal transportation services and logistics solutions. www.chrobinson.com

Find us

Nutech is a U.S. based global oilfield consultancy providing reservoir optimization and evaluation services including optimization of existing wells. www.nutechenergy.com

PwC PwC 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 companies as clients. www.pwc.pl

10 | Shale Gas Investment guide | Winter 2013

AmCham Cleantech DTZ CH Robinson HAYS NuTech PSC PwC R2R SSW DIRECTORY

10 13 92 59 68 33 110 17 42 19 94

Risk to Reputation 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. www.risk2reputation.com

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

HAYS is the world’s leading company in recruiting qualified, professional and skilled workforce. Hays Energy team is dedicated to serve energy, oil and gas; since its launch in 2007, the team has covered 200 placements for middle and top management functions. www.hays.pl

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

SSW SSW 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. www.ssw.pl

www.cleantechpoland.com

| 11

www.pwc.pl

PwC Your trusted oil & gas and chemical advisor

For years, we support our clients with knowledge and market experience by providing business advisory, tax and legal advisory, audit and accounting consultancy.

We are happy to talk with you about the needs of your business.

Business Advisory

Tax and Legal Advisory

Wojciech Słowiński – Partner phone: +48 502 184 420 wojciech.slowinski@pl.pwc.com

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© 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.

Shale Gas

investment

Guide

I nd I ca t o r s unconventional eu28 oil AND GAS

BY COMPANY

M OST ACT I V E E X P LO R E R S Company

Change in Conc.

Q1 - Q3 2014

Country

TC*

NW*

IGas

↑ ↑ ↑ ↑ ↑ ↑

(+31)

UK

38

1

(+12)

UK

23

-

(+3)

PL

0

-

↑

Egdon Resources Palomar Natural Resources INEOS GDF Suez SA ConocoPhillips Total E&P UK Ltd

(+2)

UK

0

1

(+25%) in 12 conc.

DE, UK

16

2

(+30%) in 3 conc.

PL

3

-

(+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

-

(-1)

PL, UK, NL

8

-

(-1)

PL, RO, (LT)

9

1

(-2)

DE, (PL)

20

-

(-3)

PL

3

-

(-4)

PL

16

3

(-5)

PL, ES, (DE)

10

-

(-6)

PL

9

-

(-10)

PL, ES, (DE), (SK)

26

-

(-31)

UK

31

3

↓ ↓ ↓ ↓ ↓ ↓ ↓ ↓ ↓

Cuadrilla Resources Chevron ExxonMobil 3Legs Resources Plc PGNiG BNK Petroleum Inc Petrolinvest San Leon Energy Plc Dart Energy

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

Source: Cleantech Poland Research

EU unconventional oil & gas: state of play 600

2014 Q1

2014 Q2

2014 Q3

2014 Q4

Others

500

United Kingdom

400

Sweden

300

Spain

200

Poland

100 0

Germany Concessions

Wells

Concessions

Wells

Concessions

Wells

Concessions

Wells Source: Cleantech Poland Research

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

EXPERT VIEW

By Piotr Wdowiński P r i n c i pa l A n a lys t Cleantech Poland

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 estimated good geology in the Bowland play.

Exploration in Poland is on-going but has No. of of wells been fading 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 Ireland 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 statecontrolled PGNiG and Orlen Upstream.

www.cleantechpoland.com

600

| 13

Shale Gas

investment

Guide

T

I nd I ca t o r s

UK 2013 BCM

COMMENTary

GAS P RO D U CT I O N

The UK is highly dependent on offshore gas, which pro-

Category

BCM

%

Onshore

0.01

2.1%

Offshore

38.09

97.9%

Total

38.9

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,2014 unlike in Poland, 2014 Q1 2014 Q2 Q3 2014 Q4 600 gas in the UK is mainly used in households.

100% Source: UK Government

2013 BCM

s upp ly by s o urce Source of gas supply (2013)

Capacity

500

Supply from domestic production

39

400

Pipeline imports - EEA

39.8

Pipeline Spain imports - non-EEA

0

Others

United Kingdom Sweden

The UK's 300 dependency on

imports does 200 not create so much tension as 100 in Poland, but rising costs and decreasing resources 0 have London Concessions look at Wells shaleConcessions gas to prop up supply.

Wells

y wa r No Wells Concessions Concessions

LNG imports (excluding small LNG) Poland

9.4

Germany Wells

Source: URE, UK Government

2013 BCM

sto rag e faci l itie s Facility type

Capacity

Onshore

16

No. ofOffshore wells Working capacity (bcm)

St. Fergus

7%

4.2

21% 5.70% Germany

Storage capacity to consumption ratio Aberdeen

LNG Świnou

4

Storage level as of 23 Sep 2014 (%)

Szczecin

95%

Source: URE, UK Government, Energostat

47%

25%

import origins, 2013 Edinburgh

100

Tesside

90

90

80

80 70 60

Belfast

Manchester

Birmingham Cardiff

r

Household use

70

Industry

Other

60

50

50

40

40

30

30

20

20

10

10

%

Holland

Power generation

PL-DE Lasów

Norway

Qatar

Holland

Belgium

%

Russia & Central Asia

gas consumption, 2013

Milford Haven ta Qa

Bacton

PL-DE Mallnow 100 (reverse)

Belgium

h ec z C

4% 26%

LONDON 43%

27% Source: cleantech poland, DECC

600 500

The map above shows UK transmission network and most important countries of import.

400 Above right, breakdown of import volumes by country of origin. At right, the UK power generation accounts for 26% (19 bcm) of the total gas usage, about three times more than in PL.300

Power generation

Household use

Industry

Other Source: UK Government

200

14| |Shale ShaleGas GasInvestment Investmentguide guide| Summer | Winter winter 2013 2013 2014

100 02014 Q1

2014 Q2

2014 Q3

Germany

2014 Q4

Cz

R

Shale Gas

investment

Guide

I nd I ca t o r s 2013 BCM

GAS P RO D U CT I O N BCM

%

Onshore

5.48

99.7%

0.02

0.3%

ay rw

Total

5.5

No

COMMENTary Poland is only slightly more dependent on gas imports

Category Offshore

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 LNG Świnoujście hopes to develop its estimated 350-780 tcm of shale gas.

100% Source: PGNiG, URE

2013 BCM

s upp ly by s o urce Source of gas supply (2013)

Capacity

Supply from domestic production

4.4

St. Fergus Pipeline imports - EEA

2.6

Pipeline imports - non-EEA

11.87

LNG imports (excluding small LNG)

0

Aberdeen

PL

Germany

Gdańsk

Szczecin Bydgoszcz

Source: PGNiG, URE

Facility type Belfast

PL-DE Mallnow (reverse)

2013 BCM

sto rag e faci l itie s

Edinburgh

Tesside

Capacity

Onshore

7

Offshore

0

Working capacity (bcm)

2.5

Storage capacity to consumption ratio

15.72%

Manchester

Storage level as of 23 Sep 2014 (%) Bacton

Poznań

Since April 2014, Po-

WA

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

Holland 99%

Łódź

Wrocław

PL-DE Lasów

gas inflows, 2013

Milford Haven

100 80 Cardiff

atar

n

Germany

60

Szczecin

50

PL-DE Mallnow (reverse)

30 20 10 %

Belgium

Russia & Central Asia

Germany

WARSZAWA Łódź

Lublin

Wrocław

existing

PL-DE Lasów

Belgium

2014 Q2

21%

planned

7%

h

ec Cz

47%

25%

PL-CZ

Poznań

Czech Rep.

gas consumption, 2013

Holland

R

Russia & Central Asia

Bydgoszcz

40

Holland

K

Olsztyn

LONDON

70

t Qa

Gdańsk

LNG Świnoujście Belgium

Birmingham

90

ar

h

ec Cz

Katowice

. ep

Source: PGNiG, URE

Katowice

p.

Re

Kraków

Rzeszów

PL-CZ

Source: PwC elaboration based on Gas Infrastructure Europe

PL-SK

Others

59%

Power generation

Household use

Industry

Other

Norway

In coal-reliant Poland, only 7% (1 bcm) of gas is used for power generation (left). Above left,

United Kingdom

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).

Spain Sweden

Source: PGNig, PGI

Poland Germany

www.cleantechpoland.com

2014 Q3

2014 Q4

2,500

| 15

Shale Gas

investment

Guide

I nd I ca t o r s

EU

EXPERT INTERVIEW SGIG speaks to Prof. Adam Gierek, Member of the European Parliament for Socialists and Democrats and a member of the parliamentary Committee of Industry, Research and Energy. The EP has recently green-lighted the new European Commission under the presidency of former prime minister of Luxembourg JeanClaude Juncker. The Juncker Commission, it appears, will attach great importance to the issues of European energy, 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 effective.

P r o f. A d a m G i e r e k

MEP, Group of the Progressive Alliance of Socialists and Democrats During the hearings for the candi-

date to the post of Energy Union Commissioner, 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

1616| |Shale ShaleGas GasInvestment Investmentguide guide| Winter | winter2013 2014

“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” the case of shale gas, will mean launching its industrial production, and secondly on considering the most effective methods leading to that goal.

In the past, lobby groups in the European Parliament 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, providing of course that they maintain EU environmental standards, both during exploration and future production. However, we must bear in mind that what we currently 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 Polish geology and then economic analyses. 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 the floating LNG terminal in 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 decompressed. Besides, there are the costs of transporting LNG to countries that contract it. The possibility of using imported LNG will definitely increase energy security, especially of the Baltic countries. But will this increase 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 energy prices that determine, for the time being at least, competitiveness, not only in Poland but in the whole of the European Union on global markets.

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 efficiency of up to 30 percent. The emissions 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 allowances. After 2020, however, it will account for no more than 40 percent of allowances verified after backloading has kicked in, which per account balance will necessitate the need to purchase allowances and potentially result in rising electricity prices.

Shale Gas

investment

Guide

I nd I ca t o r s tied to the east Most European countries are dependent on imported Russian gas in at least 11%. Several countries, 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 domestic production and works to increase supplies from Middle East and North Africa.

Paw 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 wC

A surge in development of LNG ter-

minals in the Baltic Sea area provides an interesting perspective for the LNG market in Central and Northern Europe. The opening of Lithuania’s floating “Independence” 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 capacity - 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 Brussels. A new directive that will further limit sulphur content in marine fuel oils, enters into force from 2015. LNG bunkering 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 segment 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.

< 10% 11-50%

Russia

> 90% LNG: Qatar, Algeria Egypt, Nigeria, Peru, Trinidad and Tobago

24%

12%

LNG Terminals in Continental Europe:

existing under construction

l n g ' s entry p o int s Location

Norway

22%

51-89%

Country

9%

Algeria, Libya

EXISTING and under construction (*) LNG terminals in europe

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

Source: PwC elaboration based on Eurogas Statistical Report 2013, Gas Infrastructure Europe, ENI World Oil and Gas Review 2013

EXPERT VIEW

EU EU

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.

Source: PwC elaboration based on Gas Infrastructure Europe

www.cleantechpoland.com

| 17

17%

%

Shale Gas

investment

Guide

I nd I ca t o r s 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 tre17% mendous opportunities.

3% With almost 20% share in total EU-28 gas storage capacities and accounting for 17% of Europeâ&#x20AC;&#x2122;s gas consumption with 29% 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

EXPERT VIEW Olga Andrienko-Bentz Director, Energy Group, PwC Ukraine

Elena Revutskaya Senior Consultant, PwC Ukraine

UA

urgently starting closing the 30-40% energy efficiency gap, which has hardly been tackled during the last 20 years.

The government has launched an amPoland bitious reform program, including harUkraine 23% monization of the national legislation with the EU norms, reforming the pricing Other EU-28 system, introducing market principles, 12% Italy reforming the national oil and gas comFrance pany the indepen17%Naftohaz, improving dence of the regulatory authority, as well Germany as modernization of Ukraineâ&#x20AC;&#x2122;s gas transportation system.

The success of this transformation depends on political will of the UkraiTransit and export nian government, as well as coordito Ukraine nated and consistent efforts of interna111 bcm Russia tional community.

Ukraine

Re

Ukraine and the European gas sector storage capacity vs EU-28

Transit through other countries 76.4bcm

gas transit Russia-EU, % of Ukraine consumption Poland

Poland

23%

17% 3%

25 24

23%

Ukraine

23 22

Other EU-28

Ukraine

21 20

12%

Italy Ukraine has 12 under19 29% 18 ground gas storage facilities, Other EU-28 France 17% 17 with total active capacity of 16 about 31 bcm. Storages and Germany 12% 15 Italy 2008 2009 2010 2011 2012 2013* 2014** system of trunk pipelines are operated by Ukrtransgaz, a Ukraine has Europe's third biggest Europe receives approximately 50% of its 100% state-owned entity.

Total France 17%EU-28 natural gas stocks storage capacity, behind Germany and Italy.

Russian gas importa via Ukraine. It was 80% are before Nord Stream began operational.

78.2 bcm and Ukrainian stocks Germany are 15.9 bcm as of November Source: Gas Infrastructure Europe EIA, Ministry of Fuel and Energy of Ukraine, Eurostat, Eurogas. * - the amount of gas Transit consumption taken from Eurogas data(data for EU 28 and Switzerland) , and was export **- the amount of gas consumption was forecasted by Eurogas (data for EU 28 and Switzerland). The value of transit through Transit to Ukraine 2014.

111 bcm 86 bcm Russia Ukraine

Europe

between rock and a hard place?

Reverse 2bcm

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 increase annual gas deliveries to 25 billion cubic meters.

Transit through other countries 76.4bcm

Transit and export to Ukraine

Russia

Transit

Ukraine

111 bcm

86 bcm

Europe

25 24

Reverse 2bcm

23 22 21

Transit through other countries 76.4bcm

20 19 18 17

Source: British Petroleum Statistical Review of World Energy June 2014, Gazprom materials, Ministry of Fuel and Energy of Ukraine

16 15

2008 18| |Shale ShaleGas GasInvestment Investmentguide guide| Summer | Winter winter 2013 2013 2014

2009

2010

2011

2012

2013*

2014**

rekla

Changes to the Geological and Mining Act â&#x20AC;&#x201C; 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 GĂłrnictwo.indd 3

2014-11-07 13:55:13

t r e nd i ng

FACEBOOK

June 24/14 rasmussen: Russia directs shale dissent

Man for hire

Former Secretary General of NATO, Anders Fogh Rasmussen, accused Russia of supporting antifracking 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 disinformation operations, engaged actively with so-called nongovernmental organisations - environmental organisations working against shale gas - to maintain European dependence on imported Russian gas,” Mr. Rasmussen said at London’s Chatham House, a foreign affairs thinktank, 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 environmental organizations said in a letter.

June 14/14 German government proposes fracking restrictions

June 26/14

June 30/14

Greece, Spain, Denmark join Europe’s June 18/14 shale gas effort FTS International and Sinopec to develop China shale gas

NY court upholds state fracking ban

20 | Shale Gas Investment guide | winter 2014

photopin

July 21/14 China starts Fuling field commercial e&p

wikipedia

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% interest in acreage in question.

“TPAO and ExxonMobil will be working closely together 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.

trending

July 10/14 Exxon Mobil, TPAO to unlock Turkish gas

Daily output on the rise

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 announcement is considered an official launch of Fuling’s commercial 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 industry 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.

Turkey delights

July 21/14 Mexico lifts ban on foreign shale gas investment

July 28/14

Aug 8/14

UK 14th O&G licensing round starts

China halves 2020 shale gas output estimate

Aug 6/14

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

www.cleantechpoland.com

| 21

t r e nd i ng Sep 17/14 casing, cementing risk to acquifers

Man in the arena

Neither horizontal drilling nor hydraulic fracturing of shale deposits is responsible for drinking water contamination, according to a study led by Thomas Darrah of the Ohio State University, published in the “Proceedings of the National Academy of Sciences”.

Analysis of eight clusters of contaminated wells in Pennsylvania 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 methane 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 tracers, 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.

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 Company 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 substantially as the well continued to flow back frac fluid, this has not yet occurred.”

cleantech poland

opppw

Sep 17/14 3Legs Resources gives up Baltic acreage

Blame at the top

Sep 9/14

Sep 23/14

US fracking sand demand outpaces supply

Exxon Mobil halts activity in Russian Arctic

Sep 18/14 Argentina overhauls O&G law

22 | Shale Gas Investment guide | winter 2014

Sep 2914

UK changes trespass law to enable access to drilling sites

trending

Oct 21/14 Christophe de Margerie CEO of Total, dies

MND

total

Oct 14/14 US shale gas output at record high

Blow out records

Christophe de Margerie, 1951-2014

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 existing records through the end of the year,” said Jack Weixel, director of energy analysis for Bentek Energy.

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 attendee at a Russian government meeting on foreign investment 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 toward developing shale resources in England, Russia and Denmark. Following the accident, Total appointed Patrick Pouyanne as chief executive officer and Thierry Desmarest 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.

Oct 27/14

Oct 28/14

Lithuania’s LNG terminal arrives to Klaipeda port

Cuadrilla’s Lancashire operations approval postponed

Oct 28/14 US energy independent by 2025: Wood Mackenzie

www.cleantechpoland.com

| 23

24 | Shale Gas Investment guide | Summer 2014

UK FOCUS

Keep Calm and Frack On 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.

CONTENTS 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 Frackingâ&#x20AC;&#x2122;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

www.cleantechpoland.com

| 25

O p e r a t i ons U p d a t e

Turning point, 2015 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 Lon d on

The UK is one of the few European 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 currently racing to get British shale gas flowing, alongside French-owned oil and gas major Total and the Swissbased chemicals company INEOS, which owns a refinery at Grangemouth, where it needs new sources of gas to convert into synthetic ethanol, ethylene, propylene and polymers: polyethylene 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 frontrunners 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 26 | Shale Gas Investment guide | WINTER 2014

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 declining North Sea fields, which some claim shale gas will replace one day, will cost £14 billion this year alone.

ON THE GROUND Currently, the bulk of company activity 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

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 planning 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 companies are undertaking site preparation at prospective wells, including independents like privately owned Cuadrilla Resources and publicly listed IGas Energy, 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 announced plans to start well site preparations at its Broadford Bridge-1 well site in West Sussex in order to drill in winter 2014 or spring 2015 (see table, p.28).

PHOTOPIN

UK focus

Two significant developments at governmental 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 designed to accommodate shale gas exploration. Horizontal drilling and fracking will in part supersede the Trespass Laws. Before the next general election in May 2015, new legislation will be passed to allow companies drilling below 300 metres for oil and gas to have easier access under landowners’ property. “[The government] has streamlined and simplified regulations and introduced the most competitive tax regime in Europe for shale gas, while maintaining robust environmental safeguards and making sure there is more information going to local communities,” the UK Minister of State for Energy Matthew Hancock MP said.

SEISMIC SURVEYS Underpinning investor interest and much of the current exploration and

evaluation of licensed blocks are independent survey reports released by the British Geological Survey and Department of Energy and Climate Change.

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

“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 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, estimated 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 seismic activity is currently underway. Neither 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 better understand the basin, to aid in identifying the best geological location for exploration drilling, coring and appraisal,” said Hannah Brandstaetter, INEOS’ spokeswoman.

OBSTACLES In general, the industry’s and government 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 opposed 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 

www.cleantechpoland.com

| 27

PHOTOPIN

leading shale gas experts to make sure the gas can be safely extracted in an environmentally 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 planning approval committee who see granting 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 general 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 University 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 September 2014 (see chart).

“The public was asked whether shale gas extraction in the UK should be allowed, a question intended to capture 28 | Shale Gas Investment guide | WINTER 2014

where shale they drill

WORK PLANS

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

Source: BBC 2014, DECC 2014, The Telegraph 2014, Wales on Line 2014

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

In July 13, before the Balcombe protests, 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” responses 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 increased slightly to +21% and may indicate

Ukraine OtherEU28

poll: should shale gas extraction in the uk be allowed?

uk f o c u s

Italy

60

France

50 Germany

40

Yes No

30 20 10 0

Jan 12

Mar 13

Jul 13

Sep 13

Jan 14

May 14

Sep 14

The public has consistently favored drilling for shale gas over the last three years

in the UK

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

Adding a significant financial inducement such as INEOS’s recent announcement 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

INEOS Upstream, where we have operational, commercial and technical support from Dan Steward, Kent Bowker and Nick Steinberger, who were the senior team at Mitchell Energy in the Barnett Shale and who pioneered the geological and petroleum engineering as well as fracture stimulation work that achieved the

“The level of interest in UK unconventional gas is growing almost daily” John McGoldrick, Dart Energy, for Bloomberg developments means the rewards will be fairly shared,” said Jim Radcliffe, INEOS’s Chairman in September 2014.

NEWCOMERS BOOST POTENTIAL INEOS 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, production.

Apart from INEOS, these companies 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

successful commercial production of sas from the Barnett,” Ms. Brandstaetter said.

Ms. Brandstaetter adds that the company is keen to move forward with mergers and acquisitions, and licence applications. INEOS completed 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,

Source: university of nottingham

Don’t know

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 McGoldrick, Dart chief executive, told Bloomberg that “the level of interest in UK unconventional gas is growing almost daily.”

LICENSING ROUND In 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 exploration 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 exploration acreage included in the 14th round, whilst maintaining our immediate focus on securing planning consents for our proposed shale gas exploration sites in Lancashire,” said Mr. Houldsworth.

www.cleantechpoland.com

| 29

LI C E N S I N G & P E RMI T T I N G

Fit for Purpose?

Permitting for shale exploration in the UK is a multi-step process involving national government and local councils.

There’s what it takes.

By Nilima Choudhury in London

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 Survey (BGS) in association with the government’s Department of Energy and Climate Change (DECC) estimated 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 complications 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 30 | Shale Gas Investment guide | WINTER 2014

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 PERMITS Four 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 Environment Agency, an executive nondepartmental 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 differences 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 development licence from DECC, after which they will need to carry out an Environmental Risk Assessment.

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

Then operators are required to notify 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 Assessment is then submitted to the MPA, which decides on the application following talks with the statutory consultees and the local community and

photopin

uk focus

imposes any planning conditions.

Following the completion of the Environmental Impact Assessment, an operator also needs to apply for environmental permits, which includes the

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-

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

In order for DECC to then provide

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.

TIMESCALE Mr. Lewis believes the UK will start to see the number of well pads dramatically 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 political parties disagree is perhaps in terms of how quickly companies go from completing paper work 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 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,” said Mr. Lewis.

Of more immediate concern, according 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 structural problem with the system which means that inherent barriers exist due to regulatory or licensing requirements,” said Professor Loughhead.

He does note however that as exploration 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, environmental 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.

www.cleantechpoland.com

| 31

Marek Czarnecki

INTER V IEW

UK, the New Poland 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.

Interview by Wojciech Kość

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 position in the UK. We don’t do any services 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 licenses in the new licensing round.

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 meters. The UK will get to production much, much faster than Poland.

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 propel forward on shale gas. I’m still optimistic 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.

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

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 in32 | Shale Gas Investment guide | winter 2014

Is it just developed midstream that gets UK operators and yourself excited 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 proximity 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 improve 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 oilfield services company, what can you infer about the UK geology?

The Bowland shale has good TOCs, good permeability and other key parameters. I think the way that commerciality 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 limestone 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 density 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.

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www.cleantechpoland.com

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photopin

UK’s Licensing Round

Tough Road Ahead

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.

By Ian Lewis in London

The UK government, which is keen to find domestic supply to replace dwindling North Sea production 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 applications 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 licensing will see some new players coming in,” said Ann-Marie Wilkinson, head of communications at IGas Energy, one of the leading players in the UK shale gas sector.

IGas, which will put in bids in the current licensing round with undisclosed 34 | Shale Gas Investment guide | winter 2014

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 agreement 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 GROW Reserve estimates by the British Geological 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 extracting 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 investment 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

DRIVING IT The absence of major players does not necessarily preclude shale gas development – 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

“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”

UK FOCUS

gas exploration and production.

“The government has tried to set a favourable set of fiscal terms and it is offering inducements to local communities to accept development. But it is doing very little else to manage the incredible opposition to fracking. While that opposition remains, it is very difficult to see any way forward,” said Professor Paul Stevens, a distinguished fellow at Chatham House, who has written 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 undecided on the benefits of fracking, the industry argues that support could easily grow, given the right circumstances.

We need to make shale gas exploration happen in a way that brings the public with us,” said IGas’ Wilkinson.

“As a business we are very pro renewables, but the reality is that we need gas to complement it in the short-to-medium 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 associated with potentially unpopular shale developments that could be delayed by high-profile, long-running court cases. The UK’s still ill-defined local and national legal frameworks for onshore shale drilling and tough environmental laws are unlikely to result in a speedy legal process.

Corin Taylor, UKOOG sector are currently only allowed to carry out seismic tests and drill vertical exploration wells. They are not yet allowed 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 public 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 Energie 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 UK’s licensing geography Existing Onshore licences Area Under Consideration Current shale gas licences

Much of Britain could be subject to bids,

but full details are set to emerge in 2015

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 produced 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 create around 64,000 jobs.

“With such benefits on offer, if explorers 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 international corporate law firm Eversheds adds that this round of onshore licensing 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 following 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 commercially viable resource, potentially giving momentum to the sector.

Additional reporting

by Nilima Choudhury.

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F r a c k i n g ’ s m at e r i a l c h a l l e n g e

Building Sand Capacity 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

Extracting shale gas in the UK is estimated to be three times more expensive than in the US. According to market research company Navigant Consulting and the UK’s Department 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 breakeven 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 million (€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 quarries 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 particular 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 36 | Shale Gas Investment guide | winter 2014

“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. 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 specialist, Clive Mitchell, said that the resources 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 DIFFICULTIES The 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 considering 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 order to build a successful supply chain, industry association, UK Onshore Operators Group, with the support of government 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 CONFIDENCE If the UK plans to deliver 400 lateral wells per year at its peak, as estimated by industry advisory body, Institute of Directors, raw materials will need to be manufactured 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 attractive tax regime by altering capital allowances and depreciation,” he said.

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

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| 37

Fears and Forecasts Cuadrilla Resources plans to drill up to eight horizontal wells split between two pads on its acreage in Lancashire, northwest England, in one of the most geologically promising areas of the Bowland shale play, which lies across the Pennine Basin that stretches across northern England.

Optimism over the Bowland’s potential has been driven, to an extent, by some similarities between its carboniferous geology and spectacularly productive US shale plays, such as the Barnett play in Texas. Data extrapolated from US drilling has augmented geological surveys and the results of what limited shale drilling there has been in the UK to produce some attractive figures for those keen to promote the potential of UK shale gas exploration.

A 2013 study by the British Geological 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 consumption 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.

38 | Shale Gas Investment guide | winter 2014

shutterstock

UK’s shale rock

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.

By Ian Lewis in London

DEPTH AND BRITTLENESS “Shale needs to be at the right depth, have the right maturity, and, very importantly, the right brittleness. It needs to be naturally fractured to a degree and then have the qualities to enable it to be fractured properly when you do your stimulation 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 formation. 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 individual drilling sites.

This factor is not just important because it could improve drilling economics. 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

UK FOCUS

“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.

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.

shutterstock

EARTHQUAKE FEARS Explorers 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 opposition to hydraulic fracturing (fracking) and prompted the UK government to impose a moratorium on its use,

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 measures intended to ensure there is a barrier 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

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 proportional to the amount of fluid used.

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

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 contaminated via that route.

Cautious forecasts Geological surveys, seismic data collection and comparisons with US shale plays highlight the potential of the Bowland 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 appropriate,” 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 illustratively 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 reserves 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, another carboniferous shale structure, where the central estimate for gas in place is put at of 80.3 trillion cf.

Another area identified as a promising 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.

www.cleantechpoland.com

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CO M P A N Y P R O F I L E

Driving it Top 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.

BY Wojciech Kość

A US-style shale revolution is indeed going to be difficult to replicate 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 40 | Shale Gas Investment guide | WINTER 2014

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 revolution happening in front of his eyes, they hope to capitalize on it.

“Shale plays are a highly capital intensive business and at the stage where the plays are more proven and the risk reduced we would look to attract a partner as our business model is to participate 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, Newton 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.

uk focus

“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”

PHOTOPIN

Charles Morgan, Hutton Energy

“While these questions remain unanswered 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 kilometers. 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 extends 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 socalled 14th licensing round. The govxxx 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 licensing 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 including work in the renewable energy sector 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 whoever judges the licensing round’s success 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 interest 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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INTERVIEW

Reputation is Everything 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.

B Y P a r k er S ny d er

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 dayto-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 challenge comes from their lack of action to foster and protect it,” Mr. Vesey said.

IT HAPPENED IN BRAZIL Consider 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 42 | Shale Gas Investment guide | WINTER 2014

“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 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 contributions to social programmes. Yet, society as a whole did not see any visible contribution. Mr. Vesey said.

“Operators have a tendency toward tunnel vision, focusing on what’s in front of them – what we call the “Inside-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 reelected, so as soon as their constituents turned against Chevron, so did the government,” Mr. Vesey said.

GROW ROOTS Operators 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 executives 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 stakeholders with whom you interact. You

uk focus

“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

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

REPUTATION IS MONEY For many, reputation is a soggy discipline, not worthy of serious management consideration.

“Very few firms can accurately assess the financial impact of reputational fluctuation. This is one of our key strengths. We provide a major contribution 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. Management opted for gut instinct and took no action. A reputational crisis exploded, taking McDonald’s by surprise. The firm lost fifty percent of its market value in six months and

changed strategy twice before refocusing on a sustainable new approach,” 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 mention above, but they certainly seem acutely aware of reputation, of paying attention to their stakeholders and of understanding their stakeholder’s impact on their business. Their behaviour seems to imply a firm who understands the “Outside-In” perspective, which is quite unusual in the industry.”

PHOTOPIN

For many, reputation is a soggy discipline

www.cleantechpoland.com

| 43

c o v e r S T OR Y

HERE COMES the SUN

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.

BY Pa r k e r S nyd e r

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 produced many great explorers, who traveled the world to turn over rocks, curious what they might find beneath. Ms. MorrisJones is one such intrepid explorer.

She worked for BP on an unconventional gas strategy, before shale gas had transformed North America, and then for ConocoPhillips, helping the IOC to extend 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 EXPLORER UK domestic gas production is mostly offshore. However, the country (see Indicators, p. 14) has been importing less and less gas from the North Sea as the reserves there decline. But the future could be different. In the same way that America has staked out energy independence by fracking tight rocks onshore, Ms. Morris-Jones 44 | Shale Gas Investment guide | WINTER 2014

COVER STORY

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 www.cleantechpoland.com

| 45

INTERMEDIARY To hedge against a prolonged investment period, companies such as The Peel Group have created an integrated, fullservice offer for operators.

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

“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

Frances Morris-Jones

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 mergers and acquisitions outside of the round rather than by submitting their own applications: this could suit private equity funding. Already we have seen some larger companies doing joint ventures with minority interests to fund early exploration, 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 explorers are trading on average at 60 percent 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 exploration 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 46 | Shale Gas Investment guide | WINTER 2014

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

“Now I think there is a growing realization amongst industry players and financial backers that once resource richness is established, the critical issue is the deliverability or produce-ability of the rock as a reservoir, and this takes longer to de-risk in an unconventional play than a conventional,” 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.

Victoria Merton

COVER STORY

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 operators reach out, the community could eventually embrace shale wells with the same level of trust as they do telecommunications infrastructure.

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

Anna McMaster

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 neither 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 supply chain benefits for the UK in upstream shale gas production.”

“Peel Gas & Oil is a natural partner in the region because of our experience in infrastructure permitting and development. 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.”

www.cleantechpoland.com

| 47

UP AND COMING Hutton 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 applications pending in France and the Netherlands.

Anna McMaster is the communications director for Hutton Energy. Since 2010, she has helped the London based explorer build a country office that supports their European operations.

“There is a real excitement here surrounding the fourteenth licensing round.

The government is creating the right framework to support the industry and we believe the UK has significant resource potential. Yes, Hutton is participating.”

Hutton Energy has changed their strategy. 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 licenses in the UK’s East Midlands covering 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 Marcellus shale play in Pennsylvania in 2004.

Ms. McMaster is the daughter of Frank Maio, to whom she attributes her decision to develop a career in oil and gas.

“I grew up watching my father work through the ups and downs of the industry 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 Kingdom is yet to be decided, but what these professionals have already done for the safe and environmentally friendly development 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.

48 | Shale Gas Investment guide | WINTER 2014

COVER STORY

T h e P HO T O G RA P HER Lou Denim is a photographer specialising in celebrity portraiture, beauty and fashion. www.loudenim.com

www.cleantechpoland.com

| 49

Investment

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

BY Pa r k e r S nyd e r

SNAP BACK TO REALITY Fast forward to 2014: BNK discovered the shales are deeper than expected. San Leon has found their frac designs are insufficient even when thereâ&#x20AC;&#x2122;s gas in the formation.

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

50 | Shale Gas Investment guide | WINTER 2014

A look at the financial statements of 3Legs Resources and San Leon Energy, shows major shareholders to include Damille Investments, Weiss Asset Management, BlackRock, Toscafund Asset Management, the Capital Group, Kulczyk Investments, along with a host of privately wealthy individuals from Denmark, 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 perceived 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 company, although the total global funding has increased (see chart).

Publicly listed exploration and pro-

UK GOVERNMENT

A look back: in 2012, the unconventional oil and gas license map of Poland was dotted with household 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 combination of private and public equity. George Soros, through hedge fund Quantum Partners, was keen to risk. Others followed Mr. Soros into the market. Inward private equity investments totaled around USD 250 million between 2010 and 2013.

EU FOCUS

“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

duction have (IN fallen out of in higher volumes of farm-out transacGlobalcompanies O&G Funding USD BILLION/YEAR) 900 800 700 600

Equity

500

Bank loans

400

Project finance

300

Bonds

100 0

2010

2011

2012

2013

Source: ThomsonONE

200

Equity investment in upstream exploration has been decreasing, as perception of risk

has grown more widespread

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

According to a global survey by EY, a consultancy, the problem is especially 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 deliver and communicate commercial successes are likely to have fewer challenges raising capital.

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

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,” according to the E&Y report.

Jon Clark, head of oil and gas in London 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 GRAVITY If 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 pullback from overseas markets, restructure their operations and are “rewarded” with low share prices.”

According to Andrew Moorfield managing director of Scotiabank, since the Deutsche Bank note was issued, European banks have become “buoyant, better 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 London’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 licensing 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 community resistance. But look at INEOS. They announced the company will compensate private communities more than the government has asked them to. There just may be a way to win the communities over,” Mr. Moorfield said.

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| 51

E U - 2 8 m a r k e t u p d a t e

EURANET PLUS

One Step Forward, One Step Back 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.

BY P i ot r W d o w i ń s k i

Europe remains a no-man’s land for shale gas, with mere 140 wells drilled to date, and strong opposition 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 technology. 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 fracking, pending further research into the impact of the technology on the environment, which is likely to delay drilling for unconventional oil and gas until 2015, at the very earliest. In Slovakia, the min52 | Shale Gas Investment guide | winter 2014

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 having 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 Kingdom 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.

POLAND Poland 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 number of companies relinquish several licenses due to low prospectivity. One of the most promising wells in terms of possible gas flow rates, Lublewo LEP1ST1H, 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

EU UPDATE

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

UNITED KINGDOM While Poland might be seen as losing momentum, the United Kingdom appears 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 productive Barnett shale in the US. It’s estimated 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 Energy 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 concessions” 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.

SPAIN Shale gas exploration in Spain - with rough estimates for resources at 88 trillion cubic feet - remains in limbo due to a legal debate that ensued after the regional parliaments of Cantabria and La Rioja regions passed anti-fracking regulations in April and June 2013 that the Constitutional Court overturned shortly afterwards.

The court said that the bans were unconstitutional because they affected

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

DENMARK 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 According to Nordsøfonden’s produc-

CLOUDFRONT

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

There are still a few companies actively 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 Starogard due to low prospectivity,” said Troy Wagner, BNK Petroleum’s general manager, in what is perhaps the best summary of the state of play in Poland: drilling continues amid growing evidence of low prospectivity.

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

more than one autonomous community, 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 operators, however, with many currently awaiting approvals for their concessions’ applications, which will pave the way to drilling.

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

tion manager Søren Frederiksen, an exploration 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 onshore, 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.

www.cleantechpoland.com

| 53

PGNiG

Down to Earth 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 o t

The enthusiasm that accompanied 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 complicated 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 independence. Once such companies as ENI, ExxonMobil, Total, Canadian Oil and Marathon had backed away from Poland, 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, however, 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 realities,” Mr. Kliszcz said.

The company is currently working to fine-tune horizontal drilling technology 54 | Shale Gas Investment guide | winter 2014

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 promising areas now.

“So far we have performed 16 exploratory drills, including two horizontal.

We are successively getting new ones under way in line with our work schedule. 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

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 conventional 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

Drilling works planned for 2014-2016 should let us evaluate commercial shale gas resources in the Pomerania region 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 PLACE One 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 exploration phase,” said Tomasz Krukowski, an

shale gas. PGNiG is consistent in carrying 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.

WAT E R M A N A G E M E N T

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

SCARCE WATER Unfortunately for shale gas operators, most shale gas plays in the world are located in areas where access to water is

subject at least to high seasonal variability, 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 conditions 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 potentially rich in shale gas, with Poland, Ukraine and France with low to medium average exposure to water stress over the shale play area.

RECOMMENDATIONS The 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 increasing transparency and engaging with local regulators, communities, and industry to minimize uncertainty, for example via disclosing and communicating their water use and management approach.

Companies should also engage in public 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 report. Finally, they can develop a water strategy and engage in corporate water stewardship.

“As governments and businesses explore [for shale gas], freshwater availability is a key challenge they must address.

With interest in shale gas growing, the time is ripe to understand its constraints,” the report concluded. plays affected percentage

water r i s k s i n s h a l e p l ays w o r l d w i d e 6%

21%

Low 41%

11%

BASELINE WATER STRESS

9%

6%

Low

Low

0.0%

Low to medium

Medium to high

Low to medium

Medium to high

SEASONAL VARIABILITY

High

Arid & low water use

8%

9%

17%

0.2%

Low to medium

Extremely high

6%

13%

Extremely high

25%

Medium to high

DROUGHT SEVERITY

High 28%

High 48%

Extremely high

39%

12%

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

Source: wri.org

Although the shale industry has a reputation for high water usage, it uses far less water than coal mining, for example. The problem that hydraulic 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 prospects for global shale gas development in the context of access to water in the world’s leading shale gas plays and attached risks. The report suggested recommendations to eliminate or at least reduce those risks.

56 | Shale Gas Investment guide | winter 2014

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G E OPOLI T ICS OF SH A L E G A S

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

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 political mantra rather than a concrete plan.

In 2014, however, Russian annexation of Crimea and the armed conflict in eastern Ukraine reinvigorated discussions about reducing Europe’s dependence 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

l ng ' s entry p o i nt s terminals 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.

58 | Shale Gas Investment guide | winter 2014

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 greatest impact will be on Ukraine and countries in southeast Europe that receive Russian gas transiting through Ukraine. Other countries, however, will

meters (to be later increased to 7.5 billion), 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 picture? While not expected to take off anytime soon in the EU, once (and if)

“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 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 website 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 floating natural gas terminal docked at the Klaipeda port in Lithuania. By signing a five-year contract with Norway’s Statoil, Lithuania, along with its neighbors Latvia and Estonia, are set to reduce their dependency on Russian gas by up to 80 percent.

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

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 pillars of the EU energy union. This further 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.

R E G ULA T IO N S

A Try Too Late?

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

Since the government has long talked of shale gas exploration as a policy priority, a special-purpose law for hydrocarbons exploration, production, 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 gastailored 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 government has difficulty preparing and implementing systemic solutions applicable to all investments domestically.

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

It appears that in the near future, given the investment difficulties and the manner of resolving them, one should benefit from the fact that the exception would become the rule. In other words, that the administrative facilitations included in special-purpose laws would be transferred to the general law and in this way would be applicable to all investments in Poland.

The new law will introduce new deadlines for the administration to issue 60 | Shale Gas Investment guide | winter 2014

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

Grzegorz Kuś Legal & 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. Understaffed 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 financial 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 summons for clarifications, which suspend deadlines) to avoid penalties. Secondly, such penalties will eventually be paid a taxpayers’ pockets, i.e. from the authorities’ 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 provisions in the draft bill, including the right to expropriate a landowner based on the decision from a province governor (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 Lawyer Poland-based operator: It does not surprise me at all that the Polish legislator has come to a reasonable conclusion that shale gas E&P qualifies to be treated as such an extraordinary opportunity and a unique investment process that requires special measures, even ones that may sometimes 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 potentially seek. The draft mentions only the “right to enter” the property, which is limited by a number of factors, including the time during which the governor’s decision is valid, and the requirement of the investor to prove the necessity 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 circumstances.

The draft bill also anticipates an administrative procedure with the landowner’s participation, to decide whether 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 compensation due for using his land.

I have no doubts that the provision in question would only be used by operators in cases where it would be basically 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 communities, but I am also confident that their use will be exceptional.

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| 61

ntal in Europe EXPERT’S CORNER

ORLEN Upstream and Tenaris find solutions for shale well in Poland 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.

By TENARIS

A PROMISING LAND Oil and gas companies have been actively exploring the contact zone between the East European Craton and the west of the European Platform since the 1970s. The vast majority of the operations led in this area have so far involved conventional wells. Today the target has changed. Hydrocarbon exploration is focused on finding unconventional reservoirs that can be economically viable.

The operating company ORLEN Upstream, 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 explore the gas accumulation and producing 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 challenges posed by this well and reached the target depth.

62 | Shale Gas Investment guide | winter 2014

CHALLENGES PAVING NEW ROADS Poland is recognized for its potential in terms of shale gas. Therefore, the country 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

EXPERT’S CORNER

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

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 horizontal section, had to be pushed and rotated several times to overcome frictional forces and thus reach the target depth.

SOLUTIONS HIGH TORQUE RESISTANCE AND COMPRESSION EFFICIENCY For 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 applications that require extreme torque resistance. This connection offers fieldproven 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.

P ROJ ECT P RO F I L E Operator

ORLEN Upstream

Location

Lublin Basin

Well

Stoczek-OU1K

Services provided

Field Inspection, Running Assistance

Products highlighted

TenarisHydril Wedge 563™ Connections

FULL SUPPORT ORLEN 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 established presence in Romania and Italy. In Romania, Tenaris has its commercial office in Bucharest, its seamless tubes mill in Zalau and the service center in Ploiesti. In Italy, presence consists of seamless mills in Dalmine, Costa Volpino, Piobino and Arcore, as well as R&D facilities and two services centers.

RESULTS A CONNECTION TO RELY ON ORLEN Upstream’s drilling of the StoczekOU1K well was a great success. The TenarisHydril Wedge 563™ connection facilitated a smooth operation. It presented zero remakeups 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 running operation, mud-logging unit recorded

a torque peak of almost 25,000 ft-lb, a maximum rotational speed of 90 RPM and a maximum weight on string of 29,000 lbf.

ORLEN Upstream pressure-tested StoczekOU1K well later on with satisfactory results.

SERVICES THAT ADD VALUE The 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 required.

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 & Fatigue analysis. The results will improve the understanding of the field conditions during the drilling and running phases, an information that will be useful when drilling other wells in the future.

www.cleantechpoland.com

| 63

global shale

A Growing Market, After All 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.

By Wojciech Kość

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 growing as the industry is being revolutionized from the inside by new techniques of horizontal drilling and hydraulic fracturing that almost doubled the efficiency of retrieval of gas from shales.

This increased efficiency is expected to prolong the life of such American plays like the Marcellus, which is expected 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 Argentina and, first of all, China, the consultancy 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-overyear growth rate of an investment over a specified period of time).

According to PacWest, a Texas-based consultancy, unconventional activity in 64 | Shale Gas Investment guide | summer 2014

Argentina has increased over the past year, focused on the promising Vaca Muerta formation in Neuquén province. “We forecast 228 unconventional wells drilled in 2014. This is up UNCONVENTIONAL WELLS, Argentina 484

500

Low estimate

450

Forecast 410

High estimate

400

339

350

312

300

277

250

230 182

200 150

398

355

123

100 50 0 2012

2013

2014

2015

2016

2017

2018

Apart from China, Argentina is often

pointed at as the first market to take off after the US.

from a forecast of 165 unconventional wells drilled in our previous projection,” said Caldwell Bailey, senior consultant at PacWest.

Sources: PacWest analysis; company reports industry sources

Shale gas, dubbed as revolution

The EIA estimates the Neuquén Basin has 583 tcf of technically recoverable shale gas (out of 802 TCF for the entire country), as well as 16 billion barrels equivalent of technically recoverable 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 significantly upgraded Argentina estimates, says Mr. Bailey.

CHINA’S PROGRESS In 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 Administration, 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

global update

There is a problem of the capital looking at investing in shale as extremely risky continental estimates tcf

g lo b a l g a s North America

1685

South America

1430

Middle East and Africa

1393

Asia-Pacific

1170

Europe

470

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.

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 Resources said last week that the Fuling

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

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

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

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

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

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 company Sinopec reached a daily output of 3.2 million cubic metres in its 29 test wells. According to Sinopec, accumulated 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 methane, with low levels of carbon dioxide and no hydrogen sulphide.

According to Allied Market Research,

PHOTOPIN

Thanks to progress in drilling and fracking technology, shale gas companies are now able to make wells profitable at a much faster rate

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,”

itable at a much faster rate.

Cash from operations by 25 leading North American E&P companies is expected to exceed their capital spending next year for the first time since 2008, according to an analysis by Factset for the Financial Times.

www.cleantechpoland.com

| 65

T HE GE C F

Enemies of new order 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.

By G o r d o n Wa s i l e ws k i

“I have met allies who can report

that Russia, as part of their sophisticated information and disinformation operations, engaged actively with so-called non-governmental organizations - environmental organizations working against shale gas - to maintain European dependence on imported Russian gas,” then-NATO’s secretary-general Anders Fogh Rasmussen 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 Poland, where the notion of Russia interfering with shale gas exploration and production has always been present.

THE AXIS OF GAS It’s not a coincidence that Mr. Rasmussen talked about Russia. Russia is perhaps the most vocal member of the Gas Exporting Countries Forum (GECF), an organization bearing some similarities to oil exporters acting as OPEC. GECF consists of 11 countries: Algeria, Bolivia, Egypt, Equatorial Guinea, Iran, Libya, Nigeria, Qatar, Russia, Trinidad and Tobago, and Venezuela.

66 | Shale Gas Investment guide | summer 2014

The GECF is currently a rather loose group of countries with little power over the global gas market, despite controlling 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 American 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 consultancy 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 galvanize 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 countries coordinating their investment and

production plans in order to avoid surplus 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 represents 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,” Mario 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.

global update

“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 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 capacity is limited both legally and technically. That said, Americans are determined to open themselves to foreign markets and claim they could start shipping 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

For example, Ukrainian prices rose immediately after the former administration 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, focusing mainly on building national hydrocarbons production and transmisnatural gas reserves BCM

t h e g a s pac k 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

Source: US EIA, BP, the CIA World Factbook

WHAT IS TO BE DONE? To counteract this, Mr. Rasmussen told Chatham House, the EU should actively support the development of the Southern Gas Corridor, a pipeline linking Azerbaijan gas fields to Turkey and further into the EU via Georgia, bypassing 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 presented a different point of view. She told the European Parliament in September 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 integrated 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 significantly increase exports of its newfound natural gas surplus - a contentious process that is already underway - but also to weaken a longstanding ban on crude oil exports,” the newspaper reported 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

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.

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 Groundswell: The Case for Fracking.

Gazprom pricing of gas for its European 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.

sion infrastructure,” said Izabela Albrycht, 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 weapon,” Mr. Levant said.

www.cleantechpoland.com

| 67

US

Marcellus Keeps on Booming 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.

BY Wojciech Kość

The Marcellus shale play,

which marked a decade of drilling in 2014 and six years since industrial scale production began, is poised for further growth in production, according 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 seeing production levels decline, even if shale plays production, bcfd 10 8

BCFD

6

Barnett Marcellus Haynesville Fayetteville

4

0 2000

2005

2010

2015

Source: EIA

2

Of the four main US shale plays, only

Marcellus’ production curve has kept growing. Growth will continue until 2020 at least.

68 | Shale Gas Investment guide | summer 2014

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 forecast of 2020 output from 14 bcfd to 20 bcfd and estimate that the Marcellus will soon account for nearly 25%

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% higher 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

“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 total US shale gas supply,” wrote Wood Mackenzie in a commentary in November 2014. The estimated value of gas to be recovered from the Marcellus 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 approximately 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-

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.

global update

ARGE N T I N A

Stable at last?

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

B Y Da v i d G a c s i n B u e n o s A i r e s

The Argentine government and

the country’s oil-producing provinces approved in mid-September a new hydrocarbon law seeking to clarify and centralise regulation to attract investors to the country’s vast but underdeveloped shale resources. Supporters hope it will encourage investment 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 estimates the country holds the world’s second-biggest shale gas (802 trillion cubic feet) and fourth-largest shale oil (27 bboe) reserves. But the billiondollar investments required to exploit these resources to scale has not come.

Capricious government policies, inflation estimated at 40%, and strict capital and foreign exchange controls make Argentina a problematic investment destination. Ongoing litigation with holdouts seeking full repayment on restructured bonds forced the country 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 consultancy, estimates 182 unconventional wells were drilled in 2013, with bestcase scenario for 2014 seeing 230 new wells.

SWEETENERS Prospective investors will note that the new law allows companies investing over US$250 million to export 20% of production 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%.

PacWest, a consultancy, assumes best-case scenario for 2014 will see 230 new wells “My impression is that this is a positive 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. Elections 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 resolution optimistic.

However, the new law addresses current 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 Energy 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 & Associates. 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”.

www.cleantechpoland.com

| 69

Small-scale LNG

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.

PHOTOPIN

A Gap to Fill J u l i u s z Kowa lc z yk

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, typically at long distances.

However, natural gas can also be liquefied, 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 alternative to pipeline, the difference is the scale.

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

TECHNICAL ALTERNATIVE Laying a pipeline network is a costly investment, up to PLN 1 million (€237,000) per kilometer. This capital intensity imposes strict economic requirements on distributors, as they usually define a minimal 70 | Shale Gas Investment guide | winter 2014

numbers of end users and levels of consumption, ensuring sufficient return on investment. Economic considerations are underpinned with technical issues, for examples difficult terrain conditions aggravating 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 liquefied 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 distribution 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 residential estate, a small or medium manufacturing or processing facility, especially in the food industry (meat, vegetables, 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 capacity 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 diameter - tall and thin cylindrical shape limits the effect of self-vaporization.

A GROWING MARKET Small 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-

technology

supply s lodiversification w s ta r t, than fa sfort business growth?

small lng, at a glance

Kingisepp, Russia

PESO

Świnoujście Tuczno

Czarna Białostocka

Chrzan

Zeebrugge, Belgium

Dąbrowa Białostocka

Density of distibution network (km/100km2) low (0-29.9)

Odolanów

medium (30-59.9)

Source: Cleantech Poland

high (60+)

Notable LNG facility LNG Silesia

LNG station Main LNG import directions

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 nd co m i ng

notable lng facilities

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.

Tuczno

A 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.

PESO

PESO 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.

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 facilities across the country.

www.cleantechpoland.com

| 71

Source: Cleantech Poland

modity traders like Barter to the state gas company PGNiG are interested in entering the small LNG market. Another example is Norwegian oil and gas major Statoil, which is currently working to establish 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 transmission grid in north-west of Warsaw Nowy Dwór Mazowiecki and Leoncin.

Any place can become a potential location for a small LNG facility if two factors are met. First, there has to be a commercial activity involving gas use. Second is prohibitive costs of pipeline investment or no transfer capacity offered. For example, a company distributing gas to a mid-sized town in central-southern Poland 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. Significant 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

FRAC K I N G TECH N OLO G Y

Release Gas, Trap CO2 A new promising method of forcing gas from shale rock is underway by a team of Polish scientists. It will use supercooled 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 nn a M a r c h a n t

a prototype method of fracturing gas-bearing shale rock with liquid CO2 rather than a mix of water, sand or ceramic proppant and chemicals, has just won PLN 50 million (€11.8 million) financing that could propel it forward 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 Industrial 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 72 | Shale Gas Investment guide | winter 2014

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

DIOX4SHELL Diox4Shell 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 introducing 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 researchers on the project. “This liquid, due to the temperature in the deposit - 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 supercritical 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

technology

Diox4Shell uses liquid CO2 instead of water

“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 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 ‘attached’ - 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 storing CO2 and an increase, by as much as by a factor of 4, the amount of extracted 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 process 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 research,” 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.

www.cleantechpoland.com

| 73

Shale Gas

investment

Guide

WHO’S

WHO

IN CONCESIONS/EUROPE COUNTRIES 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

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.

whoâ&#x20AC;&#x2122;s who www.cleantechpoland.com | 75

DENMARK

CONTACT INFO Nyhavn 43, 2, 1051 Copenhagen, Denmark info@skifergas.dk. en.skifergas.dk

holding companies

board members

Total SA

Jim Ratcliffe Andy Currie John Reece Jim Dawson

CONCESSIONS HELD

concession area

Acreage (km2)

Name

L1 / 10

2,972

2 / 10

2,289

Wells

Until 2016, Total will be conducting a series of preliminary studies to determine [if] shale gas exists in Danish shale formations

Skagen

Concession area Aalborg

Grena Aarhus Aarhus Copenhagen

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

CONTACT INFO

board members

Peter Helmer Steen CEO

Peter Helmer Steen

Amaliegade 45, 1256 København (+45) 72 26 57 50 nordsoeen@nordsoefonden.dk, www.nordsoefonden.dk

STAKE IN Concession Name

concession area Interest (%)

Holder

L1/10

20

TOTAL E&P DENMARK BV

2 / 10

20

TOTAL E&P DENMARK BV

Denmark needs to find new O&G reserves in the next decade to remain energy self-sufficient before it goes all renewables in 2050

Skagen

Concession area Aalborg

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

76 | Shale Gas Investment guide | winter 2014

GERMANY

holding companies

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

BEB Erdgas und Erdol

Nicholas Davies John McGoldrick Eytan Uliel Martin Cooper Mark Lappin

Telefon: 0511 / 6410 info@beb.de www.beb.de

CONCESSIONS HELD Name

Acreage (km2)

Ahrensheide

429

Bramsche-Erweiterung

-

Delmenhorst-Elsfleth

CONCESSIONS HELD Wells

3

-

Name

-

Misburg

232

Munsterland-West

-

Nordrhein-Westfalen Nord

concession area

Acreage (km2)

Minden

Wells

Hannover Munster

6,617

845

Hamwiede

-

Schaumburg-Verkleinerung

-

1

Harpstedt

-

Scholen

-

1

Herford

-

Simonswolde

Ibbenburen

-

Taaken Rest

Krummhorn

-

Unterweser

Magdeburg Kassel

Köln

Dummersee-Uchte Zusammenl

1

board members

Erfurt

Frankfurt am Main

Concession area

197

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

CONTACT INFO Friedrich-Ebert-Straße 160 34119 Kassel, Germany (+49) 561 301-0 info@wintershall.com www.wintershall.com

CONCESSIONS HELD Name

Acreage (km2)

Ridderade-Ost

342

Ruhr

2,493

Wells

holding companies Wintershall Holding GmbH

“Our activities are limited to preliminary geological surveys. Deep drilling and fracking are not planned” Joachim Punnel, director of operations

board members Rainer Seele Martin Bachmann Ties Tiessen Gerhard König Mario Mehren

concession area

Hannover Munster

Köln

Magdeburg Kassel Erfurt

Frankfurt am Main

Concession area

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.

- Wintershall website

www.cleantechpoland.com | 77

who’s who

CONTACT INFO

POLAND

CONTACT INFO

holding companies

Kamlesh Parmar CEO

Lane Energy Exploration Lane Resources Poland

board members Kamlesh Parmar David Bremner Richard Hills Tim Eggar Rod Per

ul. Chmielna 13A 00-021 Warsaw (+48) 22 505 91 77 www.3legsresources.coml

STAKE IN

CONCESSIONS HELD Name

Acreage (km2)

Wells

Concession Name

concession area Interest (%)

Holder

Damnica*

30

ConocoPhillips

625

Lębork*

30

ConocoPhillips

904

Karwia*

30

ConocoPhillips

Cedry Wielkie*

809

Stegna* Godkowo*

1

RUSSIA

Gdańsk

LITHUANIA

Olsztyn Szczecin Bydgoszcz

Poznań

BELARUS

WARSZAWA Łódź GERMANY

Wrocław

Lublin

CZECH REPUBLIC

Kraków

Katowice Zone of interest Concession area

* withdrawal pending

* sold to Stena in November 2014

Rzeszów

SLOVAKIA

comment: In September 2014, 3Legs Resources decided to withdraw from its three western Baltic Basic concessions, following “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

CONTACT INFO

holding companies

board members

Troy Wagner General Manager

Indiana Investments Saponis Investments

Wolf Regener Warren Nelson Coenraad Leo Hans Handler David Nelson Martin Robert

ul. Wiktorska 63 02-587 Warsaw (+48) 22 540 17 50 www.bnkpetroleum.com

CONCESSIONS HELD Name

Acreage (km2)

Wells

Słupsk

919

1

Bytów

1,169

2

Trzebielino

1,167

1

“BNK is continuing to progress and accomplish our commitments for the Bytów, Trzebielino and Slupsk blocks” Troy Wagner, general manager

concession area RUSSIA

Gdańsk

LITHUANIA

Olsztyn Szczecin Bydgoszcz

Poznań

BELARUS

WARSZAWA Łódź GERMANY

Wrocław

Lublin

CZECH REPUBLIC

Katowice Zone of interest Concession area

Kraków

Rzeszów

SLOVAKIA

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.

- Cleantech Poland

78 | Shale Gas Investment guide | WINTER 2014

POLAND

holding companies

board members

John Claussen Country Manager

Chevron Polska Energy Resources

John Watson George Krikland

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

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

concession area RUSSIA

Gdańsk

LITHUANIA

Olsztyn Szczecin Bydgoszcz

Poznań

BELARUS

WARSZAWA Łódź GERMANY

Wrocław

Lublin

CZECH REPUBLIC

Kraków

Katowice Zone of interest Concession area

Rzeszów

SLOVAKIA

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 agreement, 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

CONTACT INFO

holding companies

board members

Laurie St Aubin Country Manager

ConocoPhillips E&P Poland ConocoPhillips Poland BV Lane Energy Poland

Ryan Lance

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

CONCESSIONS HELD Name

Acreage (km2)

concession area Wells

Damnica

784

1

Lębork

1,062

5

Karwia

209

1

Following withdrawal of 3Legs’ Resources, ConocoPhillips stated that they would continue works on their concessions in Poland Cleantech Poland

RUSSIA

Gdańsk

LITHUANIA

Olsztyn Szczecin Bydgoszcz

Poznań

BELARUS

WARSZAWA Łódź GERMANY

Wrocław

Lublin

CZECH REPUBLIC

Katowice Zone of interest Concession area

Kraków

Rzeszów

SLOVAKIA

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

www.cleantechpoland.com | 79

who’s who

CONTACT INFO

Poland

CONTACT INFO

holding companies

board members

Pawel Żuk Country Manager

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

David Messina Charles Morgan Craig Burton

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

CONCESSIONS HELD Name

Acreage (km2)

Poddębice

645

Łódź Zachód

809

concession area Wells

“We are going through a process of modifying and extending concessions. We will continue to operate in Poland” David Messina, managing director

RUSSIA

Gdańsk

LITHUANIA

Olsztyn Szczecin Bydgoszcz

Poznań

BELARUS

WARSZAWA Łódź GERMANY

Wrocław

Lublin

CZECH REPUBLIC

Kraków

Katowice Zone of interest Concession area

Rzeszów

SLOVAKIA

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.”

- Anna McMaster, Hutton’s communication director

CONTACT INFO

holding companies

board members

Tomasz Tarnowski Communications

ECO Energy 2010

Bertrand Le Guern Franciszek Krok

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

CONCESSIONS HELD Name

Repki Siemiatycze

Acreage (km2)

concession area

STAKE IN Concession Name

Interest (%)

882

Lidzbark Warminski

31.67

Wisent

892

Węgorzewo

31.67

Wisent

Gołdap

31.67

Wisent

Kętrzyn

31.67

Wisent

Wells

Holder

RUSSIA

Gdańsk

LITHUANIA

Olsztyn Szczecin Bydgoszcz

Poznań

BELARUS

WARSZAWA Łódź GERMANY

Lublin

Wrocław

CZECH REPUBLIC

Katowice Zone of interest Concession area

Kraków

Rzeszów

SLOVAKIA

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

80 | Shale Gas Investment guide | WINTER 2014

Poland holding companies

board members

Piotr Gliniak Head of Exploration

Polskie Górnictwo Naftowe i Gazownictwo

Mariusz Zawisza Jerzy Kurella Jarosław Bauc Zbigniew Skrzypkiewicz Waldemar Wójcik

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

CONCESSIONS HELD Name

Wejherowo

Acreage (km2)

731

CONCESSIONS HELD Wells

Name

concession area

Acreage (km2)

8

Kock-Tarkawica

1,028

Wells

1

Kartuzy-Szemud

783

1

Pakosław Krotoszyn

1,096

Stara Kiszewa

1,178

2

Wiszniów-Tarnoszyn

1,106

1

"172"

937

Tomaszów Lubelski

741

1

"173"

937

Górowo Iławeckie

1,094

"192"

922

"193"

RUSSIA

Gdańsk

LITHUANIA

Olsztyn Szczecin Bydgoszcz

Poznań

BELARUS

WARSZAWA Łódź GERMANY

Wrocław

Lublin

CZECH REPUBLIC

942

Rzeszów

Kraków

Katowice Zone of interest Concession area

SLOVAKIA

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

CONTACT INFO

holding companies

board members

Dominika Mackiewicz PR Specialist

Orlen Upstream

Dariusz Jacek Krawiec Sławomir Jędrzejczyk Piotr Chełmiński Krystian Pater Marek Podstawa

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

CONCESSIONS HELD Name

Acreage (km2)

Wells

Garwolin

884

1 3

Lubartów

1,156

Bełżyce

1,019

Lublin

967

1

Wierzbica

702

3

Hrubieszów

415

Sieradz

917

Wołomin

1,180

Wodynie-Łuków

1,191

2

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

concession area RUSSIA

Gdańsk

LITHUANIA

Olsztyn Szczecin Bydgoszcz

Poznań

BELARUS

WARSZAWA Łódź GERMANY

Lublin

Wrocław

CZECH REPUBLIC

Katowice Zone of interest Concession area

Kraków

Rzeszów

SLOVAKIA

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 - Cleantech Poland

www.cleantechpoland.com | 81

who’s who

CONTACT INFO

Poland CONTACT INFO

holding companies

board members

Oisin Fanning Executive Chairman

Aurelian 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

Oisin Fanning Paul Sullivan Ray King Daniel Martin Jeremy Boak Piotr Rozwadowski

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

CONCESSIONS HELD Name

Acreage (km2)

concession area Wells

Iława

746

Praszka

1,199

Czersk

702

Gdańsk W

894,41

1

Braniewo S

1037

1

Szczawno

603,4

1

RUSSIA

Gdańsk

“San Leon continues to believe in the po` tential of its Gdansk W concession.”

- San Leon Energy’s news

LITHUANIA

Olsztyn Szczecin Bydgoszcz

Poznań

BELARUS

WARSZAWA Łódź GERMANY

Lublin

Wrocław

CZECH REPUBLIC

Rzeszów

Kraków

Katowice Zone of interest Concession area

SLOVAKIA

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

- Joel Price, COO of San Leon Energy

CONTACT INFO

holding companies

board members John Buggenhagen

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

CONCESSIONS HELD Name

Acreage (km2)

Wells

Rawicz

742

-

Góra

706

1

Nowa Sól

1166

2

In July 2014, Palomar signed a USD 20m joint venture with San Leon Energy on 7 concessions, some targeting unconventional O&G in Poland’s Permian Basin

concession area RUSSIA

Gdańsk

LITHUANIA

Olsztyn Szczecin Bydgoszcz

Poznań

BELARUS

WARSZAWA Łódź GERMANY

Lublin

Wrocław

CZECH REPUBLIC

Katowice Zone of interest Concession area

Kraków

Rzeszów

SLOVAKIA

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

82 | Shale Gas Investment guide | WINTER 2014

advertorial

Ms. Areta Kempińska has been a partner of Bireta Translations since 2002 where she coordinates the written and oral translation departments.

Ms. Areta KempiNsk a

picture: BIRETA

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.

Bireta - thirteen years of technical translation services

How did you get into specialized translation of technical documents?

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 cooperating freelance translators we can turnaround more than 200 pages a day.

For instance, we are working on the the Turów Power Plant (Mitsubishi Hitachi) 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 translation service providers such as SDL

Trados Studio and ApSICXbench. The software allows translators and verifiers to work on the same document and maintain cohesion and consistency within the text. The proofreaders 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 Terrapinn Shale Gas World Europe in the Cleantech Pavilion.

picture: BIRETA

W

hat’s your background and when did you go into business 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.

www.cleantechpoland.com | 83

ROMANIA/ SLOVENIA CONTACT INFO

holding companies

board members

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

Chevron Romania Exploration and Production SRL

John Watson George Krikland

(+40) 21 5996100 (+40) 21 5996101 www.chevron.com

CONCESSIONS HELD Name

Acreage (km2)

Adamclisi

900

Barlad

6,350

Costinesti

900

VamaVeche

900

Wells

1

“Chevron owns and operates the 1.6 million-acre Barlad Shale in northeast Romania, and three concessions, 670,000 acres, in southeast Romania

concession area Concession area

Bucharest

Cleantech Poland 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

CONTACT INFO

holding companies

board members

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

Ascent Resources plc

Clive Carver Leonard Reece Colin Hutchinson Nigel Moore

concession area

CONCESSIONS HELD Name

Petišovci

Acreage (km2)

100

Wells

2

Ascent currently operates the Petišovci tight gas project in Slovenia which it considers to be an outstanding prospect

Concession area

Ljubljana

Ascent Resources website

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 predominantly European onshore projects.

- Ascent Resources website

84 | Shale Gas Investment guide | WINTER 2014

SPAIN

holding companies

board members

Wolf E. Regener Director, President & CEO

Trofagas Hidrocarburos SL

Wolf Regener Warren Nelson Coenraad Leo Hans Handler David Nelson Martin Robert

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

CONCESSIONS HELD Name

Acreage (km2)

Urraca

948

Sedano

348

concession area Wells

BNK submitted six separate EIA documents for its exploration permits on its Sedano and Urraca concessions

Concession area

Barcelona

Madrid

Valencia

BNK 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

CONTACT INFO

holding companies

43 Grosvenor Street Mayfair. London W1K 3HL United Kingdom (+44) 20 3617 3913 london@sanleonenergy.com www.sanleonenergy.com

Frontera Energy Corporation S.L.

CONCESSIONS HELD Name

Aquiles

Acreage (km2)

1664

Cronos

970

Geminis

479

Libra

379

board members

concession area* Wells

Spain is a currently under-explored country, with fewer than 500 exploration wells drilled

Concession area

Barcelona

Madrid

Valencia

San Leon Energy

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

www.cleantechpoland.com | 85

whoâ&#x20AC;&#x2122;s who

CONTACT INFO

SPAIN/SWEDEN CONTACT INFO

holding companies

board members

EDIFICIO PLAZA BIZKAIA ALAMEDA DE URQUIJO, 36-PLANTA 1ª E-48011 BILBAO (+34) 944035600 shesa@eve.es

SOCIEDAD DE HIDROCARBUROS DE EUSKADI

Pilar Urruticoechea

CONCESSIONS HELD Name

Acreage (km2)

Angosto-1

261

Usapal

749.3

Mirua

752

Enara

758.5

Usoa

727

concession area Wells Concession area

SHESA plans to drill the first of several wells in 2015

Barcelona

Madrid

Company website

Valencia

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

CONTACT INFO

holding companies

Ola Blumenberg Erik Nerpin Anders Wellgren Alexander Shkuta

Mats Budh CEO (+46) 70 650 62 26 Skålmyrsvägen 36 792 50 Mora, Sweden mats@igrene.se

CONCESSIONS HELD Name

Acreage (km2)

CONCESSIONS HELD Name

Wells

Acreage (km2)

concession area Wells

Hansjo

132

Eldris

3

Ryssa nr 3

7

34

Vastra Gullerasen nr 2

3

Solleron

6

Vastra Gullerasen

3

Norra Gullerasen nr 2

110

Oresjon

124

comment:

Oresjon nr 2

124

Nusnas

0.4

Moldtjarnen

2

Vastbjorka

29

Lisselhed

22

Stumsnas

170

“The Siljan Ring is the largest known impact 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 explored by Igrene.”

- Mats Budh, CEO

Nordvasta Skattungen nr 2 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

Tina

3

Ryssa

board members

1

86 | Shale Gas Investment guide | WINTER 2014

38

9

Concession area

SWEDEN/UK

holding companies

My Simonsson Torgny Berglund Peter Schweizer Stephen Crabtree Sven Erik Zachrisson

Niclas Biörnstad CEO

Vasavägen 76, 181 41 Lidingö, Sweden (+46) 72 222 6797 info@gripenab.com www.gripenab.com/

CONCESSIONS HELD Name

Acreage (km2)

CONCESSIONS HELD Name

Wells

Skedet

6

Nyby

15

Smedsby

26

Orlunda

9

Melby

20

Abylund

19

Sandon nr 1

161

Appelby

77

Ekeby

188

Yxstad

10

Greby

71

Karlsfrid

7

Naset

3

Ossby

62

Eneby

13

Lundeby

17

Rodjan

8

Vallstena

94

Vinberga

19

Buttle

614

1

concession area

Acreage (km2)

6

Hov

board members

Wells

16 2

Concession area

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

CONTACT INFO

holding companies

board members

Francis Egan CEO

Cuadrilla Resources Holdings Ltd

Lord Browne Haroun Van Hovell John Lancaster Allan Campbell Tony Kelly Roy Franklin Francis Egan Tony Carruthers Andrew Quarles

Cuadrilla House Stowe Court, Stowe Street Lichfield, Staffordshire WS13 6AQ, UK (+44) 1543 266 444 www.cuadrillaresources.com

CONCESSIONS HELD

concession area

Acreage (km2)

Wells

PEDL 165

1,131

4

PEDL 244

154

1

Name

EXL 189

45

1

EXL 269

55

1

Cuadrilla expects that following positive outcome of current applications, drilling will begin in 2015 Cleantech 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

www.cleantechpoland.com | 87

who’s who

CONTACT INFO

UK ACQUIRED BY IGAS

CONTACT INFO

holding companies

board members

John McGoldrick CEO

GP Energy Dart Energy (Europe)

John McGoldrick Robert Neale Shaun Scott Stephen Lonie

Laurel Hill Business Park Polmaise Road, Stirling FK7 9JQ, UK (+44) 333 800 2000 www.dartenergy.com.au

CONCESSIONS HELD Name

CONCESSIONS HELD

Acreage (km2)

Wells

Acreage (km2)

Name

PEDL 012

50

PEDL 187

70

PEDL 133

367

PEDL 189

100

PEDL 200

120

PEDL 195

100

PEDL 207

30

PEDL 196

75

PEDL 210

10

PEDL 198

75

EXL 288

10

PEDL AL010

75

PEDL 147

90

PEDL 185

100

PEDL 186

100

Wells

Concession area

STAKE IN Concession Name

concession area

comment: Interest (%)

Holder

PEDL 139

17.5

IGas

PEDL 140

17.5

IGas

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

CONTACT INFO

holding companies Egdon Resources U.K.

Mark Abbott Managing Directors The Wheat House 98 High Street, Odiham Hampshire, RG29 1LP, UK (+44) 1256 702292 www.egdon-resources.com

CONCESSIONS HELD Name

Acreage (km2)

CONCESSIONS HELD Wells

board members Mark Abbott Philip Stephens Jerry Field Walter Roberts Ken Ratcliff Andrew Lodge

concession area

PEDL 182

n/a

PEDL 191

66

PEDL 202

84.2

PEDL 209

64

PEDL 237

n/a

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 139

14.5

IGas

PEDL 43

57

PEDL 140

14.5

IGas

STAKE IN Concession Name

Interest (%)

Holder

Concession area

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.

- Cleantech Poland - Cleantech Poland

88 | Shale Gas Investment guide | WINTER 2014

UK holding companies

board members

Jean Claude Perdigues Managing Director

GDF SUEZ E&P UK Ltd

Jean Claude Perdigues Delphine Cherel-Sparham Ian Conacher Andy Hirsch Rob Buchen Andy Spancer Steve Thomson

40 Holborn Viaduct London EC1N 2PB (+44) 203 122 1400 www.gdfsuezep.co.uk

STAKE IN Concession Name

concession area

STAKE IN Interest (%)

Holder

Concession Name

Interest (%)

Holder

EXL 273

25

Dart Energy

PEDL 189

25

Dart Energy

EXL 288

25

Dart Energy

PEDL 200

25

Dart Energy

25

Dart Energy

PEDL 12

PEDL 207

25

Dart Energy

PEDL 146

25

Dart Energy

PEDL 210

25

Dart Energy

PEDL 147

25

Dart Energy

PEDL 185

25

Dart Energy

PEDL 186

25

Dart Energy

PEDL 187

25

Dart Energy

PEDL 188

25

Dart Energy

Concession area

comment: GDF SUEZ will maintain 25 percent shares concessions after the acquisition of Dart Energy by IGas. - Cleantech Poland

CONTACT INFO

holding companies

board members

Andrew Austin CEO

Island Gas

Andrew Austin Stephen Bowler John Blaymires Francis Gugen John Bryant Robin Pinchbeck Cuth McDowell

7 Down Street London W1J 7AJ UK (+44) 207 993 9899 www.igasplc.com

CONCESSIONS HELD Name

PEDL 139

Acreage (km2)

concession area Wells

IGas has agreed to take over rival Dart Energy in an all-share deal for $200 mln. The deal will conclude in October

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

Cleantech Poland 1

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 another step in unlocking Britain’s onshore energy resources.”

- Andrew Austin, Chief Executive

www.cleantechpoland.com | 89

who’s who

CONTACT INFO

UK

CONTACT INFO

holding companies

board members

Christophe de Margerie Chief Executive Officer

Total E&P UK Ltd

Patrick Pouyanne Thierry Desmarset Patrick Artus Patricia Barbizet Gunnar Brock

Crawpeel Road, Altens Aberdeen, Hampshire AB12 3FG, UK (+33) 1 47 44 45 46 www.total.com

concession area

STAKE IN Concession Name

Interest (%)

Even where we are not the operator, we will support operating companies in employing best practices to minimize environmental impact

Holder

PEDL 139

40

IGas

PEDL 140

40

IGas

PEDL 209*

50

Egdon

Total E&P UK website * Opt-in agreement pending 2015

Concession area

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

CONTACT INFO

holding companies

board members

Gary Haywood CEO

INEOS 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

Jim Ratcliffe Andy Currie John Reece Jim Dawson

3 Avenue des Uttins CH-1180 Rolle Switzerland Tel: +41 (0) 21 627 7040

CONCESSIONS HELD Name

Acreage (km2)

PEDL 133

329

PEDL 162

400

concession area Wells

1

“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

90 | Shale Gas Investment guide | winter 2014

Bez n

whoâ&#x20AC;&#x2122;s who www.cleantechpoland.com | 91

Bez nazwy-1 1

2013-11-04 12:47:22

UK

Idea 2.2

- Gary Haywood, CEO of INEOS Upstream

92 | Shale Gas Investment guide | winter 2014

CON

???

Idea 2.2

who’s who

CONFERENCE

Client: Charles Maxwell

ONFERENCE

&

EXHIBITION

© www.stylographicdesign.co.uk 2014

&

EXHIBITION www.cleantechpoland.com | 93

Shale Gas

investment

Guide

ServicEs directory C o m m e n ta r y

Piotr WdowiNski p r i n c i p a l a n a ly s t, C l e a n t e c h P o l a n d

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 ToruĹ&#x201E;, a seismic services 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 directory will provide you with a list of companies operating in Europe with a focus on companies that are present in the UK. Piotr WdowiĹ&#x201E;ski (+48) 883 307 160 piotr@cleantechpoland.com

94 | Shale Gas Investment guide | Winter 2013

Europe Unconventional Oil and gas

DRILLING

Casing & Cementing Baker Hughes Exalo Halliburton Schlumberger Weatherford UOS Chemicals Brenntag Champion Technologies Clear Solutions Int. Ltd. DOW Dow Corning Dow Microbial MultiChem Sibelco Europe Coil Tubing Baker Hughes Drill-tech Halliburton Exalo Meehan Drilling Schlumberger Weatherford UOS Equipment Supply Baker Corp Balance Point Control Bentec C.A.T. CAT Discovery Drilling Drill-Lab Drilltech GE Oil & Gas ITS (Parker) JSH Drilling Kerui National Oilwell Varco Packers Plus Superior Energy Services Tech Pomp Tenaris UOS Weir Workstrings Pressure Pumping Baker Hughes Halliburton Exalo Schlumberger Tenaris Weatherford UOS Proppant Supply Baltic Ceramics Weir Water Management AECom Baker Corp CDM Smith GE Oil & Gas PP-EKO Veolia Tech-Pomp

3RD PARTY SERVICES

services

Casing & Cementing Baker Hughes Exalo Halliburton Schlumberger Weatherford UOS Directional Drilling Baker Hughes Drilltech Halliburton Exalo Meehan Drilling Kerui Schlumberger Weatherford UOS Drill Bits, Fluid Systems Baker Hughes Exalo Halliburton MI-SWACO Sirius Pruit UOS Schlumberger Drilling Tools and Services Baker Hughes Bentec Drilltech Exalo JSH Drilling Kerui National Oilwell Varco Pruitt Engineering and Modeling CCS Core Laboratories (Saybol) Geolog ILF Wellynx National Oilwell Varco Hard Banding Arnco Hardbanding Solutions Mud Logging Baker Hughes Drill-Lab Exalo Geolog GEO-data Geokrak Halliburton Schlumberger UOS Weatherford MWD and LWD Baker Hughes Halliburton Schlumberger Weatherford UOS Pipe Supply JSH Drilling National Oilwell Varco Sumitomo Europe Tenaris US Steel Workstrings Rig Contracting Discovery Drilling ExaloKCA Deutag MND Drilling National Oilwell Varco UOS Waste Management EkoTech Energy MI-SWACO Well Pad Construction CDM Smith NTS Construction

COMPLETIONS

Basin Modeling Argo Baker Hughes GEO-Data Geokrak Geomage Kidova Pangea Serafim Construction of Well Pads Construction of Roads CDM Smith NTS Construction Corporate Services PWC Trinity Corporate Services MWH Global Peco Facet Risk To Reputation Data Services Argo ION Emerson Process Management GEO-Data Geokrak Geofizyka Krak贸w Geofizyka Torun Geolog Geomage Geotrace IHS Kidova Pangea Due Dilligence Cleantech Poland Environmental Services AECom CDM Smith GSE Environmental Inwatec PP-EKO Salamander Group URS Veolia Water Facilities Management DBM Services Emerson Process Management Geological Analysis Argo Baker Hughes GEO-Data Geokrak Geomage Kidova LMKR Nutech Pangea Serafim Human Resources HAYS IP Group Land Man CDM Smith IP Group Permitting CDM Smith IP Group Seismic Services Acoustic Geophysical Applied Seismology Consultants ION Geofizyka Krak贸w Geofizyka Torun IP Group ION UOS Technical Translation Bireta

www.cleantechpoland.com

| 95

Europe Unconventional Oil and gas Logo

Company

Speciality

Area

Address

Contact

Acoustic Geophysical Services (Viking)

Seismic services

CEE

Ul. Chłodna 11 lok. 425 00-891 Warsaw

(+48) 667 985 777 infohouston@acousticgeo.com

Acoustic Geophysical Services provides acquisition services for land seismic projects. Viking Services B.V. (Viking) announced 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 Petroleum, 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 AllisChalmers 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 info@argo-geoscience.com

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, reservoir 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 ssmit@arncotech.com

Arnco Technology Trust, Ltd. - Arnco - does hardbanding in a history that dates to 1946 when its founder Roman F. Arnoldy 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, 84000 Avignon, France

(+33) 490 480 127 office@aviship.com

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 mkoprowski@bakercorp.com (PL) (+49) 1 70 7693978 arudolf@bakercorp.com (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 jens.rodiek@bakerhughes.com

Baker Hughes is an oilfield services company. Baker Hughes operates in 90 countries, providing drilling, formation evaluation, 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 info@bpc.co.uk

Balance Point Control (BPC) provides hydraulic work over, snubbing, well control, engineering, wireline and rental services. 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 chemically contaminated well.

96 | Shale Gas Investment guide | Winter SUMMER2013 2014

SERVICE DIRECTORY Logo

Company Baltic Ceramics

Speciality Proppant

Area

Address

Contact

Poland

ul. Reymonta 7, 68-300 Lubsko Poland

(+48) 22 654 66 14 office@balticceramics.com

services

Baltic Ceramics retails proppants and other products used in the extraction of hydrocarbons from unconventional 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

(+49) 592 272 80 info@bentec.com

Bentec is a manufacturer of drilling rigs and oilfield equipment worldwide based on 125 years of history. A vertical integrated 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

Poland

ul. Bronikowskiego 3/1, 02-981 Warsaw Poland

(+48) 22 648 55 77 bireta@bireta.pl

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 employing 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

Europe

Celle, Vorbruch 6, 29227 Germany

(+49) 5141 9895 0 info@consulting-agency-trade.com

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. Construction GmbH, TACROM Service S.R.L., and TACROM Drilling S.R.L. among its sister companies.

C.H. Robinson

Logistics, Supply Chain Management

Global

Al. Jana Pawła II 29 Warsaw, Poland

(+48) 22 653 65 30 tom.sullivan@chreurope.com

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&I

Technology, Procurement Construction

Global

40 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, procurement 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 approximately 50,000 persons.

CDM Smith

Engineering, Construction, Permitting

Global

Al. Jerozolimskie 123a, 02-017 Warsaw, Poland

(+48) 225 519 300 warsaw@cdmsmith.com

CDM Smith provides services in water, environment, transportation, energy and facilities. An engineering and construction 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, Warsaw Poland

(+48) 517 469 881 info@cleantechpoland.com

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.

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Europe Unconventional Oil and gas Logo

Company

Speciality

Clear Solutions International

Drilling fluids, Pumps, chemical and minerals for drilling

Area

Address

Contact

Europe

Unit B3, Wem Industrial Estate, Soulton Road, Wem, Shropshire SY4 5SD, United Kingdom

(+44) (0) 1939 235 754 info@drilling-products.com

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 bshcharansky@ccsia.com

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

Global

Herengracht 424, 1017 BZ Amsterdam, The Netherlands

(+48) 5586 244 641 saybolt.poland@corelab.com

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 Services

Facilities, project management, HSE, operations Poland and logistics

ul. Klimczaka 12B/28 02-797 Warsaw, Poland

(+48) 693 131 693 info@dbmservices.pl

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

(+31) 53 4315155 info@dgbes.com

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 software 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 info@discoveryde.com

Discover Drilling is a private equipment and drilling rig manufacturing company in the oil and gas industry. Headquartered 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 GL

Consulting, Risk Management

Global

Ul . 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 “safeguarding 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.

DOW

Chemicals, Lubricants, Gelling agents

Global

Domaniewska 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 February 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

(+48) 228 540 320 fwrpols@dow.com

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

CEE

Ul. Krośnienska 7, 65-958 Zielona Góra, Poland

(+48) 683 238 454 dl@drill-lab.com.pl

Drill-Lab has provided geological consulting and mudlogging services to customers since 1990. Custom developed software 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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services

www.cleantechpoland.com

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Europe Unconventional Oil and gas Logo

Company Drilltech

Speciality Drilling equipment rental

Area

Address

Contact

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, deepwater, 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

(+48) 22 222 3000 info@dtz.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. 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

Poland

ul. Serdezna 8, Wysogotowo k.

Poznania, 62-081 Przeźmierowo, Poland

ir@duon.pl (+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 Energy

Waste management, treatement, effluents

Global

Aleje Jerozolimskie 96, 00-807, Warsaw

(+48) 222 755 625 info@ekotechenergy.com

EkoTech Energy is a privately company partly owned by Climate Equity Solutions. CES is an investment vehicle established 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

Production Optimization

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

Europe

Klateringerweg 6, 9433 TB Zwiggelte, The Netherlands

(+31) 593 33 13 30 asperkok@bart.nl

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.

Ensign

Drilling, 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 Orchard Road, Croydon CR0 6BA, London, United Kingdom

(+44) 20 8256 1150 info@ercequipoise.com

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 including geophysical and geological modeling and reservoir simulation.

EurMidstream

Midstream Services

Europe

Chaussée de la Hulpe 120, 1000 Brussels Belgium

(+32) 266 317 63 anslester@eurmidstream.com

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 marketing@exalo.pl

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.

Expro

Well testing, wireline intervention, production systems

Global

Morton 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, flowback/clean-up, production, well integrity and intervention. 40 years, 5,000 employees, across 50 countries.

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SERVICE DIRECTORY Logo

Company Fairstar Heavy Transport

Speciality Transport (heavy)

Area

Address

Contact

Netherlands

Floor 20, 3012 CN, Rotterdam, The Netherlands

(+31) 10 403 5333 fairstar@fairstar.com

services

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 solutions

Hydraulic 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, pipeline 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, Leidschendam, The Netherlands

(+31) 70 311 1422 holding@fugro.com

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 & Gas

Water treatment, oilfield equipGlobal ment

Ul. Emilii Plater 53, 00-113, Warsaw

(+48) 22 520 53 53 piotr.bruzda@ge.com

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 GmbH

Wellsite services, environmental consulting

Europe

Carl-Zeiss-Str. 15, 30827 Garbsen, Germany

(+49) 5131 46810 nadolny@geo-data.de

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 analytics) 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

(+33) 148 103 007 gmt@gmtgeochem.com

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 info@geodynamics.it

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 differential 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

(+48) 122 991 200 marketing@gk.com.pl

Geofizyka Kraków is a geophysical company that performs and analyzes seismic surveys. Geofizyka Kraków is a geophysical 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 Toruń Poland

Tomasz Wilk, (+48) 597 914 627 tomasz.wilk@gtservices.pl www.gtservices.pl

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 history, 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 Kraków Poland

(+48) 126 338 110 geokrak@geokrak.pl

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.

www.cleantechpoland.com

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®™ The DOW Diamond Logo, Solutionism and design are trademarks of The Dow Chemical Company © 2013

0

Microbial control SolutionS For 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.com Contact us for more information: DowCIG@dow.com • +48-22-543-18-00 (phone) 102 | Shale Gas Investment guide | Winter SUMMER2013 2014

SERVICE DIRECTORY Logo

Company GeoLog

Speciality Surface Logging

Area

Address

Contact

Global, Italy, Netherlands

2 Rubislaw Terrace Aberdeen AB10 1XE, Scotland

(+44) 782 156 9280 geologinternational.com

services

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 Processing

USA, Europe, 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 multifocusing, 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 geology, high noise or low-fold seismic data.

GL Noble Denton

Technical Service Provider

Global

Brooktorkai 18, 20457 Hamburg, Germany

(+49) 403 614 90 glnobeldenton@gl-group.com

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

(+48) 224 930 135 contact@globalgeophysical.com

Global Geophysical provides seismic data processing, analysis, interpretation, and data integration. Global uses proprietary 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, Laboratory Testing

Poland, UK

Greenheys, Manchester Science Park, Pencroft Way, Manchester, M15 6JJ, United Kingdom

(+44) 161 232 7465 info@ground-gassolutions.co.uk

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, authoritative 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

(+43) 725 829 201 priegl@gseworld.com

GSE retails environmental products such as geotextiles and membranes. Headquartered in Houston, GSE has manufacturing facilities in Texas, South Dakota and South Carolina. GSE laboratories are accredited by the Geosynthetic Accreditation 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 oilfield services

Global

53 Ul. Emilii Plater 53, WFC 26th Floor, 00-113, Warsaw, Poland

(+48) 22 4707900 jerzy.wozniak@halliburton.com

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 proprietary, such as clean stream that uses UV light to treat wastewater.

Hardbanding Solutions

Hardbanding, hard facing tool joints

Global

Hardbanding Solutions Europe, Scotland

(+44) 7747 468345 colin.duff@hardbandingsolutions.com

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 toughening up oil pipe in extreme conditions.

HAYS

Human Resources

Global

ul. Złota 59, 00-120 Warsaw Poland

(+48) 22 584 5650 warsaw@hays.pl

HAYS has operated in Poland since 2002 and provide professional services in recruitment for the executive business 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

Poland

Ul. Elektryczna 2 00-346 Warsaw Poland

(+48) 604 601 050 izabela.kawczynski@interpermit.com

IP Group entered the market in 2012 to provide human resources, permitting and compensation services on a government funded seismic contract. The company has expanded into human reources to the financial and insurance markets, alongside the energy markets.

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Europe Unconventional Oil and gas Logo

Company

Speciality

Area

Address

Contact

INiG (PGNiG)

State Sponsored Research

Poland

ul. Lubicz 25A, 31-503 Kraków, Poland

(+48) 12 421 00 33 office@inig.pl

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 biuro@inwatec.pl

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.

ION

Geophysical Services, Seismic

Europe, North/ South America

2105 CityWest Blvd., Suite 400 Houston, TX 77042, USA

(+1) 281 933 3339 info@iongeo.com

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

Global

Takelaarsweg 13, 1786 PR Den Helder, The Netherlands

(+31) 88 1307 100 europesales@its-energyservices.com

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

Drilling Services

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.

Kerui

Oilfield Equipment Services

Global

Domaniewska 44, 02-672 Warsaw, Poland

Magda Szostek magda.szostek@keruigroup.com (+48) 784 772 888

Kerui Group is a Chinese company based in the region of second largest Chinese oilfield. It is a fastdeveloped 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 contact@kidova.com

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 upscaling 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 Polska

Gas, 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 aramady@lmkr.com

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, US

Little Orchard, Bardown Road Stonegate, East Sussex TN5 7EJ

(+44 7802 871688) rlansdowne@lokring.com

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

104 | Shale Gas Investment guide | Winter SUMMER2013 2014

SERVICE DIRECTORY Logo

Company

Speciality

Area

Address

Contact

Maxi Cargo

Logistics

Poland

Os. E. Raczyńskiego 31/13, 62-020 Swarzędz Poland

(+48) 61 610 10 26 biuro@maxi-cargo.pl

services

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 info@meehandrilling.com

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 Management

Global

P.O. Box 42842 Houston, TX 77242 USA

(+1) 832 628 9187 questions@miswaco.slb.com

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 productivity, production technology solutions to maximize production rates, and environmental solutions that manage waste volumes generated in both drilling and production operations.

MND Drilling & Services

Drilling Services

Global

Velkomoravská 900/405, 696 18 Lužice, Czech Republic

Radovan Jedlicka jedlicka@mnd.cz (+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

Poland

2905 Southwest Boulevard San Angelo, TX 76904, USA

(+48) 224 707 900 jerzy.wozniak@halliburton.com

Oilfield chemcial provider, owned by Halliburton, with a number of commercial, proprietary products, such as AcroClear, 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

office@nadragroup.com

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 States

Domaniewska 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 inquiries@navigant.com

Navigant (NYSE: NCI) is a global expert services firm. Through senior level engagement with clients, Navigant professionals 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 k.kolouszek@stabilizacje.net

NTS offers construction services to the oilfield. With a work history in highway construction and specializing in stabilization technologies, earthwork, roadwork, preparatory and finishing work. NTS staff has twenty years experience in implementing civil engineering construction projects.

www.cleantechpoland.com

| 105

0

Europe Unconventional Oil and gas Logo

Company

Speciality

NuTech

Petrophysical, Geological, Field study, Well Services

Area

Address

Contact

Global

7702 FM 1960 East, Suite 300, Houston, TX 77346, USA

Chris Hughes (+44) 7785 261308 Stuart Large (+44) 7966 475302 info@nutechenergy.com

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 Plus

Open 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 joel.appleton@packersplus.com

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. Multistage 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.

Pangea

Geophysical Geological Data Processing

Europe, Russia, Africa

Aleksandr Solzhenitsyn Street, 27 Moscow, Russia

(+7) 495 912 6503, info@pangea.ru

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 Geophysical

Exploration, Geophysical Services

Poland

76 Jagiellonska 03-301 Warsaw, Poland

(+48) 224 864 100 pgb@pgb.com.pl

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

(+31) 71 581 3505 info@panterra.nl

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, laboratory services, including conventional and special core analysis services, production chemistry, PVT, and geoscience staff secondment.

PECOFacet

Field Services, Lab services, On-site Testing

Global

Treforest Industrial Estate Pontypridd, Mid Glamorgan South Wales CF37 5YL United Kingdom

(+44) (0) 1443 844141 uk@pecofacet.com

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 GmbH

Completions, Pressure Pumping

Global

Bei dem Gerichte, D-37445 Walkenried, Germany

(+49) 5525 201 28 AHentschel@perforator.de

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

Global

4th Floor, 117 Jermyn Street, London SW1Y 6HH, United Kingdom

(+44) 1224 650570 patrick.odonnell@spdltd.com

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 customerâ&#x20AC;&#x2122;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 protection 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.

PwC

Business Advisory, Auditing, Tax, Legal

Global

Al. Armii Ludowej 14 00-638 Warsaw Poland

(+48) 22 523 4000 pwcpoland@pl.pwc.com

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.

106 | Shale Gas Investment guide | Winter SUMMER2013 2014

SERVICE DIRECTORY Logo

Company Risk to Reputation

Speciality

Address

Contact

United Kingdom, Germany, France

Workshop 4, Royal Victoria Patriotic Building John Archer Way, London SW18 3SX, United Kingdom

Tom Vesey tom.vesey@risk2reputation.com (+44) 20 8877 3620

services

Enterprise Risk and Reputation Management

Area

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

info@rodelta.com (+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 Group

Water, Gas Monitoring Technology

UK

Booths Hall, Chelford Road, Knutsford, Cheshire WA16 8GS, United Kingdom

(+44) 1565 757 817 info@salamander-group.co.uk

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 szwolan@slb.com

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

(+44) 1224 724535 info.scotland@scientificdrilling.com

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 Ltd

Consultant Services, Reservior Modeling

Europe

231 Bangor Road, Holywood, Belfast, BT18 0JQ, United Kingdom

(+44) 28 9042 1106 future@serafimltd.com

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, certification, and verification - with broad experience from health care to energy.

Sibleco Europe

Hydraulic Fracturing Sand Producer

Global

Brookside Hall, Congleton Road, CW11 4TF, Cheshire United Kingdom

(+44) 7764 959 383 energy@sibelco.eu

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 International Ltd.

Technology

CEE

Bucuresti-Domnesti 49-50 Street, Clinceni, Bucharest, Romania

(+40) 744 319 001 angajari@simcoint.com

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 petroleum engineering. The company’s strategy is to develop expertise in computer applications, designing original software.

Sirius e.s.

Drilling Fluids, Completion Fluids, Waste Management

CEE

Bahnhofplatz 3, A-4600 Wels Austria

(+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 Eindhoven, The Netherlands

(+31) 40 23 69 445 sales@spiritIT.com

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.

www.cleantechpoland.com

| 107

0

Europe Unconventional Oil and gas Logo

Company

Speciality

Area

Address

Contact

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. Tebodin

Consultancy, Project Management

Global

ul. Taśmowa 7, 02-677 Warsaw, Poland

(+48) 22 334 41 11 info@tebodin.pl

Tebodin has been on the Polish market for 20 years. Services include integrated design and complex management for industrial, 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

Poland

ul. Żegańska 1 04-713, Warsaw Poland

Michal Jelnicki (+48) 604 261 994 michal.jelnicki@techpomp.pl

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.

Tenaris

Line Pipe, Coiled Tubing, Casing, Connections

Global

2200 W. Loop S., Suite 800, Houston, TX 77027, USA

Matias Malik (CEE) mmalik@tenaris.com (+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

(+49) 65 92 7120 service@tpsd.de

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

(+48) 223 799 440 trinity@trinitycs.com

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, UK

Al. Jerozolimskie 123a, 02-017, Warsaw, Poland

Cezary Filipowicz cezary.filipowicz@uos.pl (+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

Europe

Ul. Rejtana 17, 02-516, Warsaw, Poland

(+48) 224 273 700 ursglobal.info@urs.com

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.

108 | Shale Gas Investment guide | Winter SUMMER2013 2014

SERVICE DIRECTORY Logo

Speciality

Area

Address

Contact

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

services

Company

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.

Pipe Tubing

Vallourec

France

Ave. du Général Leclerc 27, 92100 France

(+33) 1 49 09 35 00 contact@vallourec.fr

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 Kraków Poland

(+48) 12 423 38 66 info.poland@veoliawater.com

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.

Integrated Well Services

Weatherford

Global

Ul. Krolewska 16, 00-103, Warsaw Poland

(+48) 226 451 330 eu@weatherford.com

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.

Pumping, Proppant, Water Flowlines

Weir Oil & Gas Division

Global

Aleja 3 Maja 9, 30-062 Krakow, Poland

(+48) 126 328 469 sales.pl@weirminerals.com

Weir Oil & Gas delivers services for customers from capital projects to long term asset management contracts for continuing operations both onshore and offshore. Services range from exploration and production through transportation, refining and storage. Weir has a portfolio of high performance pumps and safety critical equipment.

Engineering and Consultancy Services

Wellynx

Europe

Viale G. D’Annunzio, 267 65127 Pescara, Italy

info@wellynx.com

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 engineering, operations and maintenance, quality, health, safety & environment.

Drilling, Pipe Procurement

Workstrings

Global

1150 Smede Hwy, Broussard, LA 70518, USA

(+1) 337 989 9675 marketing@workstrings.com

“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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www.cleantechpoland.com

| 109

Executive Lunch Meeting Our executive lunch takes place once a month. In October we reviewed changes in the regulatory regime, which aim to reduce the time it takes to obtain key permits.

BY G a b o r C h o d kows k i - Gy u r i c s

PSC’s October executive lunch offered operators and service companies 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 regulation, concerning, for example, the new scope of joint venture cooperation agreements. Operators questioned whether or not the reduced time to permitting was feasible, given the government’s previous promises to improve the permitting process.

In November, the PSC will exhibit for the second time at Terrapinn’s Shale Gas World Europe conference at the Expo XXI in Warsaw.

This year, the PSC will provide its members and partners an opportunity to network and exhibit, while discussing the future of the industry.

110 | Shale Gas Investment guide | winter 2014

Łukasz Szatkowski of Weil law firm presenting at the lunch

PSC EXECUTIVE LUNCH OCTOBER 2014 Marek Matraszek CEC Government Relations Piotr Nowak Celtique Energie Parker Snyder Cleantech Poland Victor Boraks Encana Pawel Poprawa Energy Studies Institute Anna Srokowska-Okońska Gas Plus International Anna Kaniewska Golder Associates Magda Szostek Kerui Group Richard Cao Kerui Group Stuart Large NuTech Dominika Trzaskowska Palomar Natural Resources Agnieszka Modlińska Palomar Natural Resources Grzegorz Kuś PwC Piotr Spaczyński

SSW Law Firm Michał Jelnicki Tech-Pomp Serwis Agnieszka Dyboś Weatherford Ewa Bernatek Weatherford Roman Rewald Weil, Gotshal & Manges Piotr Fedorowicz Weil, Gotshal & Manges Łukasz Szatkowski

Weil, Gotshal & Manges

PSC

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-OkoĹ&#x201E;ska of Gas Plus

Piotr Nowak of Celtique Energy

www.cleantechpoland.com

| 111

112 | Shale Gas Investment guide | winter 2014

PICTORIAL

PSC Pavilion

Terrapinn - Shale Gas World Europe November 25 & 26 | Expo XXI Warsaw

www.cleantechpoland.com

| 113

WE L L H E A D

Unlocking Britain’s Energy Potential 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

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 Britain being a net importer of gas since 2004 and gas is vital to Britain, it currently provides more than 80% of our heating needs and around 30% of our electricity generation.

In December 2012 the British Geological 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 consumption 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 114 | Shale Gas Investment guide | SUMMER 2014

significantly decarbonise the economy 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 opportunity for the economy, creating and supporting jobs in regions of the UK that need it most. It could create

operate our own Community Fund.

We take our environmental responsibilities extremely seriously and work hard to ensure our operations have minimal impact on the surrounding ecosystems and neighbours.

Furthermore, IGas works within a stringent regulatory framework in the UK which is widely acknowledged to

The key to the successful development of the shale gas industry is having a social licence to operate. direct jobs such as geologists, and construction workers, but it will also encourage spending that would benefit local businesses, including restaurants, shops and hotels.

The key to the successful development of the shale gas industry is having 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

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 Kingdom Onshore Oil and Gas, has highlighted an enormous opportunity for Britain with potentially £33bn to be spent in the next 15 or so years.

BakerCorp Poland Sp. z o.o.

Sierp贸w 33 | 95-035 Ozork贸w | Polska +48 (0) 604 113 028 | mkoprowski@bakercorp.com www.bakercorp.pl

NEED FOR

Ju偶 w Polsce !

FRAC TANK

Faced with short timelines and

SOLUTIONS ON

storage equipment is crucial for our

complex situations, providing liquid customers, particularly in Oil & Gas.

YOUR WELL PAD?

BakerCorp helps in all situations

CALL BAKER!

needed.

when integrated storage solutions are

BakerCorp offers mobile storage tanks, containment berms and ancillaries. Whatever liquid solution you need, we can offer you an integrated solution anytime anywhere.

Please visit our booth 32 at Shale Gas Europe 2013 in Warsaw!

shale gas investment guide

Shale Gas

investment

Guide

winter 2014

KEEP CALM And Frack On

winter 2014

th

UK LICENSING ROUND Acreage is up for grabs in the UK, as hopes for a shale gas boom hit a high.

Who’s Who: EU | Reputation is Everything | Andrew Austin, IGas | Marcellus Booming USA $32 | $30CAD | POLAND 100 PLN + VAT | EU €25 | UK £20