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Gazprom CEO: "Shale revolution" fell to desolated underground

October 06, 2015, 14:25 UTC+3 ST. PETERSBURG
Earlier, Russia’s Energy Minister Alexander Novak said in an interview with Rossiya 24 TV channel that the decline in shale oil production is a steady trend of recent months
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Gazprom head Alexey Miller

Gazprom head Alexey Miller

© Stanislav Krasilnikov/TASS

ST. PETERSBURG, October 6. /TASS/. Gazprom Head Alexey Miller said Tuesday that The Shale revolution fell to "a desolated underground".

"The Shale revolution has fallen to a desolated underground, this trend has an explanation," he said.

Earlier, Russia’s Energy Minister Alexander Novak said in an interview with Rossiya 24 TV channel that the decline in shale oil production is a steady trend of recent months. In the last three months shale oil production decreased by 300,000 barrels. According to Novak, investment volume reduces due to lower prices; the number of drilling rigs in the United States reduced by roughly 50% - a year ago there were 1600 drilling rigs, now only about 600.

Meanwhile, according to the World Bank report, expected preservation of low oil prices in the short-term threatens the exploration and development of new fields and creates a "special risk" for investment in the development of unconventional sources such as shale oil, oil sands and deep sea oil fields.

The report is based on the fact that the four-year period of price stability at around $105 per barrel ended, and lower prices are expected in 2015, and only a slight increase in 2016.

Gas production in Europe

Gas production in Europe in recent years has fallen by 50 bln cubic meters to 267 bln cubic meters, Alexey Miller said.

"Production in the European countries is reducing. Over the last 10 years it reduced by 50 bln cubic meters," he said.

According to the forecast of the State Duma Commission on the Fuel and Energy Complex, gas production in Europe by 2025-2030 will drop to 180 bln cubic meters per year.

Earlier, Russia’s Energy Minister Alexander Novak in an interview to Rossiyskaya Gazeta said that the Europe’s dependence on Russian gas import will only grow in the future. According to him, gas consumption in Europe will increase as the economic recovery takes place. According to the calculations of the Ministry, about 100 bln cubic meters of gas will be additionally consumed by Europe, and import dependence on gas will increase in response to falling domestic production at the fields.

Reduction of gas pumped in Ukraine’s underground storages

Gazprom reports a reduction of gas pumped in Ukraine’s underground storage facilities and a reduction of reversed gas from Europe, the company’s CEO said.

"Now we’re reporting a reduction of gas volumes pumped in and a reduction of reversed gas," Alexey Miller said.

According to the data provided by Ukraine’s gas pipeline operator Ukrtransgaz, the country’s gas reserves in underground storage facilities totaled 15.8 bln cubic meters as of October 5. All in all, 8.2 bln cubic meters of gas have been pumped in to Ukraine’s underground storages this year, the company said.

As the country’s minister of energy and coal industry Vladimir Demchishin said earlier Ukraine has to accumulate around 19 bln cubic meters of gas in its underground gas storage facilities to safely pass the upcoming heating season.

Turkish Stream

The real capacity of the "Turkish Stream" could reach 32 bln cubic meters per year, Gazprom Head Alexey Miller said Tuesday.

"Turkish stream implies direct non-transit deliveries from Russia to Turkey. We can say that the capacity will be up to 32 bln cubic meters," Miller said.

The Turkish Stream will serve as an alternative to the South Stream gas pipeline project abandoned by Russia in December 2014. The larger part of the Turkish Stream pipeline will run across the Black Sea and coincide with the South Stream route approved earlier.

As TASS reported earlier, according to Russia’s Energy Minister Alexander Novak, Russia expects to sign intergovernmental agreement with Turkey on the Turkish Stream natural gas pipeline on 2 lines. The two countries are working at the details of the intergovernmental agreement on the Turkish Stream project.

"Both sides have received documents related to the intergovernmental agreement. Currently, we’re working at particular details. When the technical part is finalized the project will be clarified. We’re waiting for elections to be held in Turkey [early parliamentary elections are scheduled for November 1 - TASS] and new government to be formed. After that we’ll discuss some certain aspects of the agreement," he said, adding that Russia "takes the Turkish Stream as seriously as Turkey does."

Novak also said that currently "the issue is about 2 lines of the pipeline," which require construction licenses. "Their total capacity will reach 31.5 bln cubic meters of gas per year. The first stage is 15.75 bln cubic meters line aimed solely for Turkey, while the second stage and the remaining volumes are planned for Europe’s south-east," he said.

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