Christopher Burns (Gaffney, Cline & Associates), Adrian Topham SPE
(Baker Hughes), Ramin Lakani SPE (Gaffney, Cline & Associates)
The shale gas revolution on North America has created an incentive for the rest
of the world to chase this challenging hydrocarbon resource. Currently around
44% of the 20.6 tcf annual gas production in the US occurs from unconventional
resources, with this forecast to rise to 65% by 2020. The pitfalls and
challenges faced by North American development projects provide a wealth of
experience, which can be used to understand how we can apply technology more
effectively in Europe and North Africa. However, there are differences in both
operating environments and gas markets between North America and Europe and
North Africa, and we aim to highlight these differences as well as the
similarities. Unconventional oil and gas projects in Europe and North Africa
are currently at an early stage of their life cycle, exploration and appraisal.
We identify the following key challenges for the European region:
• The potential spread of the North American unconventional gas revolution to
Europe and North Africa could create competition and depress gas prices.
Reduced gas prices and increased costs will considerably reduce the margin for
error in exploring for unconventional gas. Therefore there is a need to apply
technology effectively, to avoid having to learn “by the drill bit”.
• A lack of infrastructure and specialised equipment, particularly in North
Africa, leading to a higher cost base for developing the region’s
• The regulatory environment in Europe is not presently conducive to
development of shale gas resources together with the negative public perception
of the environmental risk associated with shale gas development.
Aside from these medium to long term challenges, Europe at present is facing a
more critical short term challenge: the need to prove the concept by completing
and producing the first economic shale gas wells.