Fracking Failing to Crack China, Europe Shale, Exxon Says - Bloomberg
Some shale formations in Europe and China are impervious to drilling techniques that opened vast reserves of natural gas and oil from Texas to Pennsylvania, said Rex Tillerson, Exxon Mobil Corp. (XOM)’s chief executive officer.
New methods and tools will need to be invented to tap many of the shale fields that energy companies and governments expect eventually to yield a bonanza of fuel, Tillerson said during a meeting with analysts in New York today.
Exxon, the largest U.S. gas producer after its 2010 acquisition of shale driller XTO Energy (XTO), failed in its first two efforts to crack gas-rich shale fields in Poland. Gas discovered in a pair of wells finished during the final three months of last year didn’t flow, even after the company used high-pressure jets of water and sand to create fissures in the rocks.
“Some of the shales don’t respond as well to hydraulic fracturing,” Tillerson said during a meeting with reporters after his presentation to analysts. “It’s going to take research and time in the lab to understand that.”
Some parts of U.S. shale formations also have proven impervious to hydraulic fracturing, or fracking, he said. The company is studying whether using different fluids, proppants or pumping techniques will be successful, Tillerson said. Proppants are tiny granules of sand or ceramic used to hold open fissures that allow oil and gas to flow through rock.
“Parts of some of these well-known shale plays everyone’s all excited about don’t work,” Tillerson said. The geologic obstacles may stem from the depositional history of the formations and factors such as high temperatures deep under ground, he said.
Yet-to-be developed fields in shale rock and under deep seas are expected to contribute 1 million barrels a day of new oil production by 2025, Yves-Louis Darricarrere, president of exploration and production for Paris-based Total SA (FP), said on March 6 at the CERAWeek conference in Houston.
Exxon’s U.S. shale holdings include 400,000 acres in the Bakken region of North Dakota and Montana, 800,000 acres in the Permian Basin in west Texas and New Mexico, and 170,000 acres in the Oklahoma’s Woodford Shale, Tillerson said.