Monday, April 19, 2010

Dark Thoughts: Polish Shale, Arthur Berman

The Financial Times posted an interesting story summarizing a Wall Street analyst's negative take on the prospects for developing shale gas in Poland.  Poland is one of a handful of European countries that has seen speculative development activity in pursuit of gas.  If gas can be produced economically in the region, the market would certainly support it.

The analyst from Bernstein Research (whose analysts seem to have a negative take on domestic shale gas too) points out deficiencies ranging from geological irregularities to difficult surface geography to poor E&P infrastructure that he thinks will make it difficult to economically exploit Poland's shale resources. 

This opinion notwithstanding, there are still many shale gas fans in Europe who do believe the opportunities can be exploited.  Here is a link to a very good and detailed summary of shale gas opportunities in Europe from E&P Magazine.

Even if Europe is not the next shale gas frontier, it can at least count on a seemingly endless number of QMAX tankers filled with LNG arriving from Qatar to ease the pressure to buy overpriced Russian gas. 

Speaking of negative takes on shale, shale skeptic Arthur Berman surfaced again last week in Calgary.  He continues to espouse the belief that shale gas is not the panacea that many believe (or say) it is.  He also believes that many producers have inflated their reserve calculations, presumably to impress Wall Street.  Specifically on the Haynesville Shale, Berman thinks the average EUR will be closer to 3 BCF rather than the 6+ Bcf most producers claim.  He thinks there will be some super wells, but they will be the exception rather than the rule.  He thinks most wells will not be economical unless prices stay above $7/MMBtu.

1 comment:

Anonymous said...

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