<a href="http://youngpetro.org/2013/03/06/how-is-it-possible-to-produce-oil-from-sand/"><b>How is it possible to produce oil from sand?</b></a> <a href="http://youngpetro.org/2011/10/09/people-engineers-and-spe-members/"><b>People, Engineers and SPE Members</b></a> <a href="http://youngpetro.org/2012/12/19/if-i-were-a-prime-minister/"><b>If I Were a Prime Minister…</b></a> <a href="http://youngpetro.org/2012/12/26/polish-shales-delayed/"><b>Polish shales delayed?</b></a> <a href="http://youngpetro.org/2013/01/11/russia-continues-the-policy-of-states-companies-monopoly/"><b>Russia continues the policy of state companies’ monopoly</b></a>

Gas severance tax could stunt job growth in Pennsylvania

Gas severance tax could stunt job growth in Pennsylvania

  According to study released May 7 by the Associated Petroleum Industries of Pennsylvania (API-PA), proposed natural gas severance tax would have negative economic consequences for the state. This is a highly productive industry that supports thousands of jobs and generates  $34.7 billion annually to the state economy. It is because of Marcellus natural gas trend, a large and prolific area of shale gas extraction from the  Marcellus Formation which stretches across Pennsylvania. It is the largest source of natural gas in the US.

Marcellus_Shale_USGSMarcellus Shale

  „Higher energy taxes could put a damper on energy activity, and the commonwealth could be worse off with a new severance tax” said Stephanie Wissman, API-PA executive director. He also warned that if a new tax will be created, the commonwealth could lose 6,000 jobs just in 2016. The cuts won’t be just in the oil and gas sector but also across a range of industries that are part of the gas industry supply chain and from related service industries.

  In Pennsylvania exists local impact tax, which is collected from every shale drillsite in this state. Under Pennsylvania law, the passage of a new severance tax would repeal the existing gas impact fee. But the study estimated that new tax may cause an investment and production losses in amount of over $20 billion in value added or gross state product to the Pennsylvania economy during 2016-25.

  By 2025, supported employment in the state could drop by nearly 18,000 relative to projected levels without the tax, the study said, adding high-paying construction and oil and gas sectors would be hardest hit. “State lawmakers should reject the severance tax so that the benefits of Pennsylvania’s energy development continue to flow” said Wissman.

  The conclusion is that there is going to be jobs reduction regardless of the new tax. It could just make the cuts more noticeable. It also shows that the current situation in o&g industry not only depends on extractive or technological factors but also on the goodwill of the government. One move, such as creating this new severance tax, could stop the industrial flow by lowering the production profitability, causing jobs reduction and making the situation worse overall.

sources: americanpetroleuminstitute.com

Polarled deepwater pipeline project

Polarled deepwater pipeline project

On 6th May Statoil commenced a construction of Polarled Pipeline in the Norwegian Sea. It will transport natural gas from Aasta Hansteen field to Nyhamna Gas Plant in Western Norway.

Installation of this pipeline is an exceptional operation. While the length of the pipeline will elevate at about 480 kilometres, the project depth is record-breaking. Polarled will be laid at water depths reaching 1265 metres. Although pipelines located deeper already exist, it is the first time in history that pipe of 36’’ diameter is planted at this depth. What is more, the bottom of the the Norwegian Sea is an unfriendly environment for any engineering operation. With average depth of 2000 metres, the glacial seabed is a rough and irregular terrain.


This region of Norwegian Sea lacks gas transport infrastracture. The heads of Statoil are expecting that this project will open a field for similiar operations in the future. Eldar Sætre, executive vice president for mid- and downstream operations says

“Polarled will open a new region and facilitate further exploration activities and development of future discoveries in the area. This will contribute substantially to maintaining the role of the Norwegian continental shelf as a long-term, reliable gas supplier.”

 It will as well demand modernisation of BP-owned Nyhamna Plant.

The project is connected with development of Aasta Hansteen field. It includes first installation of a SPAR platform on the Norwegian Continental shelf. A SPAR is a typical platform used in deep waters. It consists of a single large-diameter vertical cylinder supporting a deck which is weighted at the bottom by containers filled with dense fluid which provides stability. The deep draft design allows more wind, wave and currents resitivity. SPARs are enduringly anchored to the seabed by a spread mooring system.

The drilling of Aasta Hansteen field is scheduled to begin in first quater of 2016 and start of production is expected in third quater of 2017. The field will produce around 130 thousand BOE per day during plateau stage. Estimated recoverable volume is 47 billion standard cubic metres of gas.

The total CAPEX for both invastments is estimated at 7,5 billion USD.


Sources: statoil.com; ramboll.pl; inzynieria.com
IMG: statoil

Actual and Future Scenarios of Shale Gas in Europe CEE Shale Gas & Oil Summit 2015 Report

Actual and Future Scenarios of Shale Gas in Europe  CEE Shale Gas & Oil Summit 2015 Report

Barbara Pach, Karolina Zahuta

    From 9th-10th March our attention was attracted by the Eastern Europe Shale Gas&Oil Summit 2015 which was held in Radisson Blu Hotel in Warsaw. This event gathered many international authorities from the O&G industry; technical experts, professionals and students from Belgium, France, Germany, Hungary, Lithuania, Netherlands, Norway, Poland, Romania, Russia, UK, Ukraine and USA. The two-day conference, with four sessions each day, paid attention to the themes such as previous experiences and future predictions for shale gas in Europe. What we found the most interesting were the newest methods of extracting gas from shale with the use of CO2, legislation of exploring shale gas in several countries, the public opinion on shale gas and many others.


     These highly interesting presentations and discussions allowed us to prepare an overview of the current situation and the future of shale gas exploration in Europe. Marek Madeja, Poland Country Manager for Cuadrilla reminded the audience that it took about 18 years to start commercial shale gas production in the USA while in Poland it is still a fresh issue. That’s why there’s no comparison between the US and the current situation in Europe which still needs time to develop. Akshay Pasrija from United Oilfield Services mentioned another reason why we shouldn’t compare the two continents – the difference in geology which means that technology used in the USA cannot be implemented in Europe. Furthermore, there’s a big difference in law – in the USA it’s in a landowner’s business to explore potential hydrocarbons while in the European Union, the resources belong to the state. Moreover the EU regulations and recommendations are restrictive.

    Undoubtedly, the attitude of government matters too. It seems that there’s a need for government investment in basic science and research (notice that the USA has spent a lot of money before achieving the success in production).  “Behind a “yes” decision there is a risk”, the experts said, that’s why important decisions are made with concern, postponed or avoided by executives. Summarizing the discussion, which took place in the third session of the second day of the conference, when it comes to the situation in Poland, it looks like the biggest oil & gas companies aren’t so convinced to step into the Polish market, because no one will risk losing money when it could take a long time to develop and stabilize the current situation. For entrepreneurs it’s safer to go home rather than to invest money in Poland right now. Moreover, Paweł Poprawa, expert in unconventional gas and oil,highlighted the importance of the much-needed good PR of shale gas exploration. Local communities should  be informed and aware of the real dangers of  shale gas exploration and extraction. An example for this is the situation in UK, where drilling was blocked many times by protests of citizens.

    What more should be changed? According to lawyer Maciej Jóźwiak, we need a clear, transparent law.  The process of giving licenses should be sped up and the problem with taxation should be solved looking at the experiences of other countries that produce hydrocarbons from unconventional reservoirs. In Mr Poprawa’s opinion firstly we have to frack more, then extract and invest more money in research. Patience and changed approach may also play a big role in improving the situation.

Making a general conclusion, the market is unpredictable and many factors may influence the situation of shale gas in Europe. It can change very quickly and attract investors again, even within the next decade.

     To sum up, as students, this conference gave us a view on current and future shale gas and oil exploration. Hearing from experienced people about various interesting topics was very enlightening. We can see a chance for developing the current market situation, we just have to create the possibility for things to go in the right direction and be patient. As a YoungPetro delegation we are looking forward to more such fantastic events we are always willing to participate in. Special thanks to Charles Maxwell, the organizer of CEE Shale Gas&Oil Summit.