Investment Key to UK's Unconventional Gas Potential

Investment in Drilling Services is Key

Douglas Westwood Reveals Study Findings at Aberdeen Conference

Unconventional gas is a key catalyst for diversifying the UK and Europe’s energy supplies and minimising the reliance on overseas imports, leading industry analysts Douglas Westwood will tell delegates at a major industry conference in Aberdeen today. (TUESDAY, MARCH 1)

They will also reveal why the North-east’s world-class oil and gas expertise is vital to capitalise on the huge opportunities emerging in Europe.

Andrew Reid, managing director of Douglas Westwood, is one of the key speakers at Aberdeen’s first Unconventional Gas Conference. He will unveil the full findings of a new study that the company has conducted into unconventional gas – The World Unconventional Gas Market Report 2011-2020.

He said: “The UK is estimated to have underground coal gasification reserves totalling approximately 17 years worth of consumption, while European countries such as Poland have 48tcf of shale gas by some estimates. Although this may enable supply diversification and reduce overseas imports, huge investment is needed in the oilfield services sector to develop them. Unconventional gas is changing the shape of the industry globally, but within the UK and Europe investment and increased expenditure is needed over the next decade.”

“The UK is also leading the development in coal bed methane and underground coal gasification projects. This localised energy production is coming from coal bed methane at collieries in Derbyshire and West Yorkshire, while reserves have been identified in Scotland, Yorkshire and North Wales. Full commercial production of these resources, however, will require large investment in drilling and field management services.”

The Douglas Westwood report highlights the opportunities for the services sector within oil and gas industry – notably for drilling companies - to harness its expertise from around the world and build on the success seen in North America.

Joseph Dutton, analyst and lead author of the study for Douglas Westwood said: “To reach levels close to the production seen in North America, European companies must invest heavily to increase rig numbers, drilling capabilities and field management services. This investment will provide large scale business development opportunities for UK and European companies in the coming years.”

He added: “The first producing shale well in Europe located in the north-west of England in the Bowland shale, near Blackpool, has been drilled nearly five years before most analysts expect production in Europe. If investment does not increase in the short-medium term period, European production may not occur before 2020.”

The inaugural ‘The Challenge of Making Unconventionals Conventional 2011’ conference, which is being held at the Aberdeen Exhibition and Conference Centre from March 1 to 2, is focusing on the opportunities in shale gas, tight gas and coal-bed methane (CBM).

Among other high-profile industry figures speaking at the event are former BP Chief Executive Lord Browne; and Quentin Fisher, Professor of Petroleum Geo-engineering at the University of Leeds; Tom Pickering, of Geometric Drilling; Uisdean Vass, of Maclay, Murray, Spens; Mark Keller of Halliburton;, Greg Herrera of Energy Ventures, John Donachie of Simmons and Company; and Michael Hurley, Global Lead Advisory Partner for Oil and Gas at PWC.

The event has been organised by Aberdeen City Council and is being chaired by Simon Seaton, Vice President of Halliburton UK, with support from the Industry Technology Facilitator (ITF) and the Aberdeen section of the Society of Petroleum Engineers.

Visit the website www.unconventionalgasaberdeen.com to see the full programme and speakers, along with exhibition, registration and sponsorship opportunities.

ENDS (01.03.11)

Notes to editor:

Andrew Reid biography
Andrew Reid is based at Douglas Westwood’s Aberdeen office where he has been responsible for a series of research, due diligence and strategic review projects for major investors and contractors to the oil & gas service industry worldwide and has completed over 60 transactions in the oil services sector.

Previously at Ernst & Young, Andrew was an M&A advisor focused on the oil & gas industry managing buyside and sellside mandates and corporate development projects. He also has extensive experience as an energy analyst including market modelling, forecasting, and due-diligence studies within Ernst & Young and ODS Petrodata.

Prior to these appointments, he was a sellside equity analyst responsible for European oil service coverage with investment bankers Simmons & Company.