LONDON (Alliance News) - The British Geological Survey and the UK Department of Energy and Climate Change on Friday provided a central estimate of 4.4 billion barrels of shale oil in the Weald Basin in the south-east of England, as the UK government has launched a process to simplify land access rules to speed up the ongoing drive for shale drilling.
The resource estimate - which accounts for the total amount of oil and not necessarily what can be commercially extracted - shows a range of shale oil in place between 2.20 billion and 8.57 billion barrels in the region, one of three areas believed to be highly prospective for shale based drilling in the UK. The other two are the Bowland shale region in the middle of England and the Carboniferous Midland Valley of Scotland.
For comparison, the equivalent of roughly 45 billion barrels of oil has been extracted from the UK North Sea in the past 40 years, according to the UK Office of Budget Responsibility.
However, the Weald estimate recognised no significant gas resource, as expected, mainly because the shale is not thought to have reached the geological maturity required to generate gas.
It follows shale gas estimates, completed by the British Geological Survey in 2013, for the Bowland shale region, which showed a central estimate of 1,329 trillion cubic feet of gas and a range between 822 trillion cubic feet of gas and 2,281 trillion cubic feet of gas.
These gas figures are high compared to offshore UK gas resources, which were estimated at between 92.7 trillion cubic feet and 109.0 trillion cubic feet at the time of the Bowland shale gas estimate.
However, until significant exploration drilling is conducted on both the Weald Basin and Bowland shale, the estimates cannot be considered representative of what is able to be economically produced, as more detailed understanding of the geology along with non-geological factors such as oil price, operating costs and the scale of development agreed by the local planning system will affect the amount of oil which can be produced.
The Carboniferous Midland Valley of Scotland region is currently being studied by the British Geological Survey.
In the US, fuel prices have been falling sharply as fracking has become commonplace across such states as North Dakota and Mississippi.
However, regions of the US have recently downgraded their shale oil and gas reserves. Earlier this month, there was a significant reassessment of the Mississippi Lime region geology in the US, reducing gas reserves by 45% to 450 million cubic feet due to an improved understanding of the geology of the region. Next month, the US Energy Information Administration is expected to publish a new estimate of US shale deposits.
EIA officials recently told the Los Angeles Times that previous estimates of the total recoverable oil in the Californian Monterey shale reserves are overstated. The LA Times said the revised estimate will be slashed by 96% to 600 million barrels of oil from 15.4 billion barrels.
So far in Europe fracking has had mixed results, often being either controversial or unreliable. In the UK, there have been major protests against the method, which critics fear will pollute water tables in rural areas and may cause small earthquakes.
However, the shale industry in the UK is seeing a major push, with companies such as Total SA, Cuadrilla Resources Ltd, IGas Energy PLC and Egdon Resources developing fracking operations around the country.
Earlier this month, IGas Energy, which has licences on the Weald basin, said it had agreed a deal to buy Dart Energy Ltd for GBP117.1 million in shares, a deal that will create a company with the largest area in the UK licenced for shale gas fracking.
IGAS Energy shares were up 5.0% to 135.40 pence Friday and have now increased 66.5% in the last year.
Separately on Friday, the UK government announced proposals to simplify land access rules in order to drive forward the shale gas development process in the country.
The Department of Energy and Climate change said it is launching a consultation process to make it easier and quicker to drill underground, with proposals that there should be underground right of access for shale gas and deep geothermal operations below 300 metres.
It also sets out proposals that there should be a voluntary community payment of GBP20,000 per lateral well and a clear notification system to alert local people that a shale gas operation will be taking place in their area.
?These proposals allow shale and geothermal development while offering a fair deal for communities in return for underground access at depths so deep they will have no negative impact on landowners," UK Business and Energy Minister Michael Fallon said in a statement.
http://www.latimes.com/business/la-fi-oil-20140521-story.html
By Tom McIvor; tommcivor@alliancenews.com; @TomMcIvor1
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