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ExxonMobil will move forward with a long-term oil development in Argentina's Bajo del Choique-La Invernada block, part of the Vaca Muerta Shale, that is expected to produce up to 55,000 BOE/D within 5 years. The project will consist of 90 wells, a central production facility, and export infrastructure connected to the Oldeval pipeline and refineries. If the expansion is successful and business and market conditions allow, ExxonMobil may invest in a second phase that would produce up to 75,000 BOE/D, the company said. "We are encouraged by the excellent results of our Neuquén pilot project and look forward to increased production through this significant expansion," said Staale Gjervik, ExxonMobil senior vice president of unconventional. "The reforms implemented by the federal and provincial governments have been critically important to enabling the development of the Vaca Muerta basin as one of the country's main energy resources."
Egypt announced this week that it has awarded several exploration blocks to four of the world's oil majors in both its Mediterranean and Red Sea territorial waters. Chevron, Shell, and a joint-venture between Shell and the UAE's Mubadala operating company were each awarded blocks in the Egyptian Red Sea. The total exploration area covers more than 3,800 sq mi. and is believed to hold promising gas reservoirs. Egypt's petroleum ministry said that the minimum investment value of these blocks is around $326 million. This is the first time that Egypt has licensed exploration areas in the Red Sea.
ExxonMobil announced on Monday a capital spending plan that is focused squarely on the company's highest-potential developments. The company also issued a warning to investors about a major impairment to many of its dry-gas projects. ExxonMobil plans to spend between $16 billion and $19 billion next year and between $20 billion and $25 billion annually up to 2025. These figures represent a considerable reduction from ExxonMobil's March capital plan that forecast $30 to $35 billion in exploration and development spending. In addition to its marquee developments offshore Guyana and the Permian Basin in Texas and New Mexico, the new capital program will also focus on "targeted exploration" projects in Brazil and the company's chemicals division, according to a statement from ExxonMobil.
The European shale gas revolution is still in its infancy and though its commercial potential could rival that of North America, significant challenges lie ahead. France has put a moratorium on shale gas activity while a comprehensive study into its environmental impact is being carried out, and its National Assembly has voted in favor of a ban on hydraulic fracturing.
The potential for shale gas production in Europe is undoubted, as consultancy IHS CERA estimates that Europe’s total shale gas in place could be 6,115 Tcf. Among the key challenges that will determine the ultimate productivity in Europe is a regulatory environment that is currently ill-suited to unconventional gas, the company said. “Regulations designed for traditional exploration and production in Amsterdam. “We expect Europe to be a significant part of future activity.”
Poland Leads the Way
Poland plays host to Europe’s largest known reserves of shale gas. Leasing activity in the country’s three main basins—the Baltic Basin, the Podlasie Basin in the east, and the Lublin Basin to the south—is well under way. The country is keen to push forward with shale gas production as it looks to break away from its reliance on Russian gas supplies.
The US Energy Information Administration (EIA) estimates that Poland has 792 Tcf of risked shale gas in place, with 514 Tcf in the Baltic Basin, 222 Tcf in the Lublin Basin, and the remainder in the Podlasie Basin. Chevron and ExxonMobil have been joined by a large number of smaller players such as DPV Service, Cuadrilla, EUR Energy, and Mazovia Energy in securing acreage across the country.
Talisman is carrying out seismic acquisition on con-cessions in the Baltic Basin and it is on track to spud its first two shale gas wells in the fourth quarter of this year, the company said. It moved into the Polish plays through a farm-in arrangement with San Leon Energy for a 60% interest in San Leon’s three concessions. Talisman is committed to drilling a minimum of three wells—Gdansk-W, Braniewo-S, and Szczawno—which cover 600,000 acres. Three optional wells with horizontal sections will be drilled after a successful first phase of testing. San Leon is also engaged in a five-year exploration and development program on its two concessions, Nowa Sol and Wschowa in the Permian Basin South. Both concessions are on trend with prolific Rotliegendes gas and Zechstein oil production.
Nexen recently entered into an agreement with Marathon to jointly explore 10 concessions in Poland’s Paleozoic shale play and it says it will pump USD 100 million into shale-related activities. Nexen will acquire a 40% working interest in the concessions, which encompass more than 2 million acres. Marathon is acquiring 2D seismic this year and plans to drill one or two wells in the fourth quarter and potentially seven or eight wells during 2012.
Conventional oil and gas discovered resources in 2019 are on pace to rise 30% from last year and reach their highest level since the beginning of the industry downturn. Global discoveries yielded 3.2 billion BOE during the first quarter, with 2.2 billion BOE alone coming in February, the most since August 2015, according to data from research consultancy Rystad Energy. A successful exploration push by the majors--namely ExxonMobil--is driving the rebound as companies refocus on expanding their resource base after lower activity in recent years. The US major alone accounted for 38% of the total volumes following its Glaucus-1 natural gas discovery off Cyprus and Tilapia and Haimara oil and gas discoveries off Guyana, ranking Nos. 1, 3, and 7, respectively, of this year's biggest finds. ExxonMobil announced in February that its Glaucus-1 well intersected a 133-m gas-bearing reservoir on Block 10 southwest of Cyprus in the Eastern Mediterranean Sea. Based on preliminary interpretation of the well data, the discovery could represent an in-place gas resource of 142–227 billion cu m, the company said.