Polish shale gas costs triple those in US, claims Schlumberger

By bne IntelliNews December 1, 2011

bne -

An official of the global oil services company Schlumberger has claimed that the cost of drilling for shale gas in Poland is almost three-times as expensive as it is in the US, casting more doubt over claims the unconventional energy source can free Central Europe from Russia's energy grip.

Since US shale gas revolutionised the global gas market over the last decade, European nations such as Poland and Ukraine have been lining up to tell the world that their large reserves could bring energy independence. However, Moscow has maintained that geological and political conditions in Europe mean a shale gas revolution there is highly unlikely. Both sides have bickered about the details as part of ongoing negotiations over the price of Russian gas exports.

One of the major issues in Europe is that it is much more crowded than the US, and has stricter environmental regulations. That helps make the cost of drilling a 2,000-metre horizontal well in Poland around $11m on average, says Peter Richter, global unconventional technology and marketing manager at Schlumberger, according to Bloomberg. Meanwhile, the same operation costs just $3.9m in the US. "We can't do things here the way we did them in US, where 30,000 wells will be drilled this year," Richter said. "In Europe it won't be possible due to population density."

Speaking at a conference, he added that the lack of infrastructure and the need both for expertise and to address public concerns over the industry will delay Poland's shale gas development.

Polish Prime Minister Donald Tusk said in September that Poland hopes to see its first commercial production of the gas as early as 2014, and that the country could achieve "gas security" by 2035. "After years of dependence on our large neighbour, today we can say that my generation will see the day when we will be independent in the area of natural gas and we will be setting terms," he was quoted by AFP as saying.

Poland has granted more than 100 licenses to explore for shale gas, with 11 wells completed out of a mandatory 124, some drilling as deep as 3,600 metres.

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