Report WG1 - progress achieved so far, next steps

ANNUAL CONFERENCE European Science and Technology Network on Unconventional

Hydrocarbon Extraction

Working Group 1 (WG 1):

Exploration, demonstration and production projects in the EU

23rd February 2016

Brussels, Rue Froissart 36, Centre Borschette

Grzegorz Pieńkowski, Alwyn Hart

WG1 was created in order to create a database on

exploration, demonstration and production projects in the EU • GOALS:

• A comprehensive list of projects in the EU

• A comparative analysis based on the data collected.

For preparing the output, the WG1 was split into the following Tasks:

(A) Collation of existing and where relevant, planned unconventional

hydrocarbon exploration/production projects in the EU,

(B) Comparative assessment of environmental data gathered in the

database, including comparison at international level (beyond EU)

(C) Identification of gaps and R&D needs, building on assessment of

project specific data carried out,

(D) preparation of an annual conference and report

CONVENTIONAL versus UNCONVENTIONAL – moving frontiers

GEOLOGY/RESOURCES ENVIRONMENTAL RISK ASSESSMENT

Shale

gas/oil

Tight gas Coal bed

Methane

Water/fluids Air/climate Seismicity Well

integrity

Conoco

Phillips report

Europe 2015

German list of

wells 2014

Preview

CBM Poland

2013

Fracfocus

analysis 2015

Climate

change

German

report 2015 +

EuroGeoSurv

ey statement

2013 different

view)

Bowland

Seismicity

report 2011

UH wells’

integrity 2014

Silurian

shales Poland

exploration

2013

Tight gas

Poland press

release 2015 +

tight gas

Poland report

2015 (full and

short)

Pre-mine

recovery of

CBM 2014

Fracking

wastewater 2015

Vertical

extends of

fractures 2012

Paleozoic

shales of

Poland 2014

Groundwater

contamination

2015

Gapowo and

Syczyn report

Shale gas

boreholes

Poland 2015

Water

management and

UH 2013

Shale gas/oil

resources

Poland 2012

Monitoring of

flowback

Bowland 2011

Oil & Gas Poland general report 2015 Guidelines for environmental risk assessment Green Leaves 2011

Lebien report 2012

UK Shale Gas and the environment 2013

Summary of 7 environmental impact reports Poland 2015 (in Polish)

DATA MATRIX (CIRCABC) p.r. papers reports datasets

Nu

mb

er

OP

ER

AT

OR

NA

ME

OF

CO

NC

ES

SIO

N

CO

NC

ES

SIO

N N

UM

BE

R

Co

ncessio

n L

icen

cin

g A

uth

ority

BO

RE

HO

LE

TY

PE

OF

BO

RE

HO

LE

UT

M Z

on

e

UT

M X

(m)

UT

M Y

(m)

Lo

cality

- Co

un

try

Lo

cality

- Co

mm

un

e

Lo

cality

- co

un

ty

Lo

cality

- vo

ivo

dsh

ip

Drillin

g S

tatu

s

Op

era

ting

Sta

tus (E

xp

lora

tion

/

Pro

du

ctio

n)

ST

AR

T O

F D

RIL

LIN

G (Y

YY

Y)

ST

AR

T O

F D

RIL

LIN

G (M

MM

-YY

))

Year C

om

ple

ted

(YY

YY

)

EN

D O

F D

RIL

LIN

G (M

MM

-YY

)

LIQ

UID

AT

ION

WE

LL

ST

IMU

LA

TIO

N

DA

TE

OR

WE

LL

ST

IMU

LA

TIO

N (Y

YY

Y)

DA

TE

OF

FIR

ST

WE

LL

ST

IMU

LA

TIO

N

(MM

M-Y

Y)

DA

TE

OF

SE

CO

ND

WE

LL

ST

IMU

LA

TIO

N

(MM

M-Y

Y)

DA

TE

OF

TH

IRD

WE

LL

ST

IMU

LA

TIO

N

(MM

M-Y

Y)

TE

ST

RE

SU

LT

S (b

est re

su

lts g

iven

in

m3/2

4h

)

Date

of W

ell D

eco

mis

ion

ing

(MM

M-Y

Y)

EN

VIR

ON

ME

NT

AL

IMP

AC

T S

TU

DY

OT

HE

R

1

Lane E

nerg

y

Pola

nd S

p. z

o.o

.

Lębork

16/2

007/p

Łebie

ń L

E-1

vertic

al

Pola

nd

Now

a W

ieś

Lębors

ka

Com

ple

ted

Explo

ratio

n

2010

cze-1

0

2010

lip-1

0

hyd

raulic

fractu

ring

2010

lis-1

0

no

no

positiv

e

?

No

7

Lane E

nerg

y

Pola

nd S

p. z

o.o

.

Dam

nic

a

17/2

007/P

Warb

lino-1

H

horiz

onta

l

Pola

nd

Głó

wczyc

e

Com

ple

ted

Explo

ratio

n

2011

sty-1

1

2011

lut-1

1

hyd

raulic

fractu

ring

2011

lis-1

1

no

no

positiv

e

?

No

8

ExxonM

obil

Explo

ratio

n

Pro

ductio

n

Pola

nd S

p. z

o.o

.

Miń

sk

Mazow

iecki

31/2

008/p

Sie

nnic

a-1

vertic

al

Pola

nd

Sie

nnic

a

Com

ple

ted

Explo

ratio

n

2011

lut-1

1

2011

kw

i-11

yes

hyd

raulic

fractu

ring

2011

lip-1

1

no

no

negativ

e

?

No

9

Saponis

Investm

ents

Sp. z

o.o

.

Słu

psk

34/2

009/p

Lębork

S-1

vertic

al

Pola

nd

Lębork

Com

ple

ted

Explo

ratio

n

2011

mar-1

1

2011

kw

i-11

hyd

raulic

fractu

ring

2011

kw

i-11

no

no

positiv

e

?

No

10

Lan

e E

nerg

y

Po

lan

d S

p. z

o.o

.

Lęb

ork

16/2

007/p

Łeb

ień

LE

-

2H

ho

rizo

nta

l

Po

lan

d

No

wa W

ieś

Lęb

ors

ka

Co

mp

lete

d

Exp

lora

tion

2011

maj-1

1

2011

cze-1

1

hyd

rau

lic

fractu

ring

2011

sie

-11

no

no

po

sitiv

e,

24460

m3/2

4h

?

YE

S

SHALE GAS - well-by-well dataset (well that have been drilled, with licenses

granted, fractured wells are marked; source – governmental)

Other well-specific datasets (composition of fracturing fluids) – International Association of Oil and Gas producers:

http://www.ngsfacts.org/findawell/ and OPPW website: http://www.opppw.pl/en/fracturing_fluid_composition/23

The wells list is focused only on shale

gas/oil. From the total of 132 wells,

only a small fraction of them (14 in

total) were stimulated (12 in Poland, 1

in UK and 1 in Germany). There were

preliminary assessed also other types

of unconventional hydrocarbons wells.

As such, there were found in total:

• 331 Tight Gas wells distributed as

following: 327 wells in Germany, 2

in Poland (HF), and another 2 extra

in Poland which were registered as

Tight Gas and Shale Gas

• 106 CBM wells all from UK (of

which 3 yielded commercial

production); few exploratory wells

from France and Poland were

documented but not listed.

CBM/Tight Gas list is not

comprehensive.

The last updated Shale Gas list contains a total

number of 132 Shale Gas sites distributed among the

following countries

Site-specific data input – microseismic centres at fracturing stimulation, Lubocino

Height of hydraulic fractures is not in excess of 80 m. The horizontal range of the

induced fractures was more extensive – on average, they reached a distance of

maximum 180 m from the horizontal borehole segment.

TRUE UNCONVENTIONAL TIGHT GAS RESOURCES

(BASIN CENTRE GAS ACCUMULATIONS)

GAS IN LESS PERMEABLE SANDSTONES

(SOMETIMES IDENTIFIED WITH TIGHT GAS)

TIGHT GAS – DIFFERENT TYPES OF RESOURCES

Only the B type: list

from Germany, 323

entries – 6 from

Poland – not fully

disclosed, to be

supplemented

Coal Bed Methane – limited activity

106 wells drilled

in UK

IGas Co.

operates 3

productive wells

(Doe Green near

Liverpool).

Several wells

drilled by the

Française de

l'Energie in

France

Wesoła Mine, Upper Silesia – horizontal well and hydraulic

fracturing test in a working coal mine. Larger scale activities

planned by PGNiG (National Petroleum Company)

Shale gas recoverable resources of the onshore and offshore Baltic –

Poland – are estimated for maximum:

1920 Bcm (1,92 Tcm)

Taking into account constraints on key parameters of the calculations the higher

probability range of recoverable shale gas resources is:

346 - 768 Bcm

With the level of current gas consumption in Poland (14,5 Bcm/y) the shale gas

resources together with conventional fields are an equivalent of:

- 35 - 65 years of cumulative gas consumption on Polish market, SHALE OIL

Shale oil recoverable resources of the onshore and offshore Baltic –Poland

- are estimated for maximum:

535 MMtons (3905 MMB)

Taking into account constrains on key parameters of the calculations the higher

probability range of recoverable shale oil resources is:

215 – 268 MMtons (1569 – 1956 MMB)

These resources are therefore 8,5 to 10,5 times higher than documented

conventional fields in Poland (26 MMtons; 190 MMB).

With the level of current oil consumption in Poland (24 MMtons; 175 MMB) shale

oil together with conventional fields are an equivalent of:

- 10 - 12 years of cumulative oil consumption on Polish market

RESOURCE DATA – THE POLISH REPORT, 2012

Substantial disparities in preliminary

estimations – refinement of

assessment methods is needed

(EUOGA)

Although still limited, (72 wells, of which just 12 hydraulically fractured), the

new data allowed better understanding of the shale play in Poland – and

actually may tell us what we can expect elsewhere in Europe. Hitherto

technical results of appraisal drilling in Poland (71 completed wells, of which

12 were stimulated) have been below expectations (best test outputs reached

between 10.000 and some 20.000 cubic metres per day). Low formation

pressures, high clay content and modest TOC content are indicated as main

reasons for hitherto disappointing results of exploration.

150 Bcm a year! Same

amount as Europe imports

from Gasprom! That

stirred imagination and

entry into Poland of Exxon

Mobil and other giants.

Recovery factors based on multiple analogous

North American shale plays !!!

Thermal maturity (%Ro) of

the Lower Silurian shales

in Poland

MORE DETAILED STUDIES – MAPS OF CERTAIN PARAMETERS

UK perspectives - by analogy with similar producing shale gas plays in N.

America, the UK shale gas reserve potential could be as large as 150 bcm

GEOLOGICAL ASSESMENT – IN SPACE (BASINS) AND GEOLOGICAL TIME

Good geological background is the first step conditioning further exploration – this

is particularly important in the case of unconventional hydrocarbons. European

geology is considered as a very complex one

North America vs Poland – and Europe – note the sheer scale

of American basins and shale reservoir properties

Polish Basin

Main American

basins

After: Ottmann & Bohacs

NEXT STEPS - WHAT IS SWEET SPOT?

WELL-SPECIFIC APPROACH - SCREENING OF AN ORDOVICIAN TARGET

EXISTING WELLS WITH A HIGHER AVERAGE ORGANIC MATTER (TOC) >1

Compiled by Adam Wójcicki

? offshore

Good Average

IN EACH TARGET INTERVAL:

Thickness - potential volume of gas-in-place

+ Composition of bulk rock (carbonate, quartz, total clay) –

brittleness, susceptibility to hydraulic fracturing

+ Total organic carbon (TOC) – generation of hydrocarbons

____________________________________________________

= POTENTIAL SWEET SPOT (however, you have to be lucky to have all these

delights occurring together in one place)

After all, the depth of

potential sweet spot is also

important – the deeper,

the higher the cost

1

Environmental study carried out at 7 test-site locations: 1 –

Lubocino, 2 – Stare Miasto, 3 – Syczyn, 4 – Wysin, 5 –

Zawada, 6 – Łebień, 7 – Gapowo

*Identification of the local conditions

and field work planning

*Examination of the baseline status

of the environment prior to the

commencement of exploration (2

sites)

*Measurements while drilling

vertical/directional wells

*Studies during hydraulic fracture

stimulation and gas flow testing.

*Examination of the status of the

environment on completion of drill

site operations

*Monitoring of the status of the

environment after the completion of

downhole operations.

Recommendations/conclusions (PL reports): • Polish government and regulatory entities concluded on the basis of site specific study

(environmental impact assesment) , carried out at 7 shale gas exploration wells, that

hydraulic fracturing process does not pose long lasting, significant impact on environment, if

existing technical rules are observed.

• Special concern should be put on waste management, as high quantities of drilling wastes,

flowback and produced water might pose hazards to natural environment on site and

elsewhere.

• Ensuring safety of the environment and sufficient public perception and safety in production

areas will require an adequate control of technical operations and the establishment of

uniform, independent, long-term monitoring of the environment. Further

exploratory/production operations should be preceded by:

- site specific water supply study (incl. alternative water sources)

- baseline status of surface and groundwater (quality and quantity),

- background concentrations of methane in groundwater,

• baseline concentrations of methane in soil gas – accurate measurement of thermogenic

methane emission still remains difficult. Differentiation between different sources of

thermogenic methane is even more difficult, if possible at all

Environmental impact assessment can be seen as assessing the consequences and

results following certain action and event – thus, such approach can offer verification of

environmental risk assesment.

19

UK Environment Agency, Onshore Oil & Gas Sector

Guidance, 2015

EU still in early exploration phase

EU shale drilling activity remains low

Drilling in the EU accounts for less than 3% of the shale wells drilled outside

North America

Hydraulic fracturing of horizontal wells has been limited

Main activity still in Poland, in future better perspectives in the UK, possibly

development in Germany and Romania

During the Working Group meetings it was noted that there is still an issue of

common language, particularly in the debate between NGOs, science and

industry, because some words used can be very misleading in a different

context – for example: definition of well integrity and its failure, magnitude of

eathquakes, mixing different types of subsurface activities.

GENERAL CONCLUSIONS:

THE WG1 ACHIEVEMENTS:

The Workgroup 1 deliverables are products of the dialogue among Network experts and the collaboration between several internal services of the Commission regarding various environmental aspects of hydraulic fracturing, or by collating disparate information from public domain or grey literature.

There were created the following:

• The list of shale gas/oil exploration wells in EU – organised in a consistent manner having the well as central unit of assessment

• Preliminary list of tight gas and CBM (to be further developed); European unconventional hydrocarbons wells which was partially populated with the latest available information

• Collection of relevant references, organized in three cathegories: databases, reports, peer-reviewed papers. Additionaly, databases were complemented with two working worksheets (for user input), focusing on the environmental studies and relevant baselines/monitoring as established in the Commission Recommendation (2014/70/EU) – a matrix with various parameters to be filled in

• A GIS project assembling the information from all input files (wells list, environmental worksheets, database) into a geodatabase and presenting the content on geo-referenced maps; an online interactive database interface allowing basic operations like filtering, creating various infographics or conduct statistical analysis to be performed.