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News Extra: US Energy Information Administration says UK has “substantial” shale prospects

26 July 2013

An EIA report entitled 'Technically Recoverable Shale Oil and Shale Gas Resources: An Assessment of 137 Shale Formations in 41 Countries Outside the United States' considers the UK to have  substantial volumes of prospective shale gas and shale oil resources within shale formations distributed in the northern, central and southern portions of the country.

An exploratory drilling site at Balcombe in West Sussex - Photo: Cuadrilla
An exploratory drilling site at Balcombe in West Sussex - Photo: Cuadrilla

The report, published in mid-June, estimates that up to 26 trillion cubic feet (Tcf) of unproved wet shale gas resources could be technically recovered, against 470 Tcf in Europe as a whole

The Administration’s current estimate of the UK’s shale gas resources is about 10% higher than its initial 2011 assessment, while new shale oil potential has also been added. At the UK's current rate of gas consumption of 2.85 Tcf per year, the estimated shale resources amount to some nine years of UK gas demand.

The report says that compared with North America, the shale geology of the UK is considerably more complex, while drilling and completion costs for shale wells are substantially higher. The two main shale exploration regions are:

* The North UK Carboniferous Shale Region. A complex assemblage of isolated structural basins and troughs is present across northern England and southern Scotland. These contain prospective organic-rich shales of Carboniferous age, including notably the Bowland Shale. Within the greater Pennine Basin, individual sub-basins include the Bowland, Cleveland, Cheshire, West Lancashire, Northumberland, East Midlands, Gainsborough, Midland Valley, as well as others. The Bowland Sub-basin is the only area to undergo shale exploration drilling to date.

* The South UK Jurassic Shale Region. In southern England the Wessex and Weald basins extend offshore into the English Channel. They contain Jurassic-age shales that are oil-prone. While no shale drilling has occurred here yet, the region includes Britain’s largest onshore oil field and appears highly prospective for shale oil development.

As regards political opposition to shale development, the EIA says it is greater in the UK than in Poland, but less than in France or Germany, pointing out that hydraulic fracturing got off to an “abysmal” start in the country when the first shale production test well triggered small local earthquakes during fracture stimulation, causing the government to ban onshore hydraulic fracturing for eighteen months to better evaluate the risks.

In January 2012 the British Geological Survey noted that the risks of shale development to groundwater and earthquakes had been exaggerated. Minor earthquakes caused by the Preese Hall-1 well were “comparable in size to the frequent minor quakes caused by coal mining. What's more, they originate much deeper in the crust so have all but dissipated by the time they reach the surface.”

At least six oil and gas companies are targeting shale gas exploration in the UK but only two have actually drilled shale wells. 

This comes at a time when the first substantial investment in UK shale plays by a large, established exploration company was announced by Centrica. 

On June 13 the parent company of British Gas announced it was taking a 25% stake in the Bowland shale exploration licence area from operator Cuadrilla Resources and its Australian partner AJ Lucas at a cost of £40million. 

Centrica will commit to drilling a series of six wells to test the area’s shale gas potential in a follow-on investment worth £60million. Depending on how that round of exploration and appraisal work goes, Centrica has an option to continue to a development phase where it will invest another £60 million, bringing the group’s investment to £160 million.

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