The Drilling Roulette

We operate a concession in Suceava area, while Chevron focuses on an adjacent area in Barlad. Some older drillings revealed the possibility that shale gas could be found in the Suceava area as well. We want to check on that, but we don’t carry any shale gas explorations in Suceava. We are a small company and such an exploration is extremely expensive. We produce conventional gas there.

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POPESCU BOGDAN

POPESCU BOGDAN

MANAGING DIRECTOR at ZETA PETROLEUM (ROMANIA) SRL

 

 

Q: You’ve recently signed a geological data exchange agreement with Chevron, in the view of finding potential shale gas resources in Romania. How will this partnership work?

 

Bogdan Popescu: We operate a concession in Suceava area, while Chevron focuses on an adjacent area in Barlad. Some older drillings revealed the possibility that shale gas could be found in the Suceava area as well. We want to check on that, but we don’t carry any shale gas explorations in Suceava. We are a small company and such an exploration is extremely expensive. We produce conventional gas there.

 

We are signing a data exchange agreement with Chevron. Our people will get involved into a study group. Our geoscientists will work with their counterparts, to help Chevron drawing some conclusions about their concession and also to help us understand if we have an added value in our concession. So far, the agreement is in the hands of Chevron’s lawyers and we are waiting for their feedback.

 

I’ve been doing myself together with another colleague some evaluations regarding shale gas during the last one and a half years. The result is that, apparently, Romania has such resources for some 60 years of production only from the Paleozoic play. But we don’t know for sure these resources exist and the information we have is based on past drillings made with other purposes than identifying shale gas deposits.

 

Q: How dangerous is it to extract shale gas and what’s its legal status in Romania?

 

Bogdan Popescu: We hear so many indictments that are not true. One of them is that the extraction of shale gas pollutes the groundwater. No oil activity has polluted the groundwater so far unless there was an accident, let alone shale gas extraction. It is a myth.

 

A second allegation is that the horizontal drillings cause earthquakes. It is true, but these earthquakes have a degree of 1 or 2 on the Richter scale. It is as if I jumped off a table.  They are less intensive than the explosions at quarries, or heavy traffic on a macadam road which we accept.

 

The shale gas drillings are safe. There hasn’t been any accident so far reported in the US, which drilled more than 50,000 wells in unconventional plays during the last 20 years.

 

In Romania, theoretically, we are allowed to explore and exploit it. The oil law doesn’t mention the type of oil gas or condensate we can exploit. There were huge protests against shale gas exploration in the Barlad area. Chevron has obtained licenses to explore several permits at the end of 2011, but the process was delayed because of these protests. They’ve been waiting ever since.

 

Now they’ve been allowed to do seismic tests in Dobrogea, which is a non-invasive procedure of listening to the earth. It produces small earthquakes that are captured by electrodes, which help us see the structure of the earth. There is a big scandal about it and activists are complaining these tests are destroying beaches and polluting the groundwater, which obviously is nonsense.

 

The current government seems to understand better what the exploration is about. This was not the case of the previous government, which delayed beyond limits the ratification of concessions and environmental permits. However, there are still a couple of concessions that are waiting for the ratification from the government in place.

 

If the geophysical field work in Doborgea shows there are certain structures there that can be drilled, Chevron will start drilling permitting procedures. A company we bought, Regal Petroleum, had already made similar geophysical tests in the Barlad area and, based on that, Chevron decided there are two locations where wells could be drilled to check on the existence of shale gas potential.

 

In spite of all the scandals, Romania doesn’t know so far if it has such resources. It could be possible that Chevron invests up to EUR 300mn to fulfill the committed exploration and then leaves. Romania has proven that it has shale formations, but we don’t know if they have commercial gas in them, because they’ve never been tested and drilled for that purpose. If we find commercial gas in them, we could keep prices low.

 

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WRITTEN BY THE SAME AUTHOR:


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