statoil unconventional gas
DESCRIPTION
TRANSCRIPT
1 -
Statoil Unconventional Gas Press BriefingAugust 25, 2010
Stavanger, Norway
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Agenda• What is unconventional gas?
• How is shale gas produced?
• Where is unconventional gas located?
• Why did Statoil invest in North American shale gas?
• Current status: Statoil’s JV with Chesapeake
• Next steps in Statoil’s unconventional gas journey
• Q&A
3-
What is unconventional gas?
• Many different types of unconventional resources
• Low permeability and porosity -difficult for gas and liquids to flow through it
Shale outcrop, Marcellus, New York
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Source Chesapeake Energy
How is shale gas produced?
• To reach the deep target gas, a normal well is drilled
• The bore is extended laterally to create a horizontal well
• The well is hydraulically fractured, allowing gas to flow
• At the surface gas enters pipelines that take it to market
• The well produces for 40 years
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How is shale gas produced?
A producing well pad
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How is shale gas produced?
A Frac Site
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EuropeResource: 145 tcfProduction: 0.0 bcfd
EuropeResource: 145 tcfProduction: 0.0 bcfd
AustraliaResource: 78 tcfProduction: 0.64 bcfd
AustraliaResource: 78 tcfProduction: 0.64 bcfd
Latin AmericaResource: 13 tcfProduction: 0.04 bcfd
Latin AmericaResource: 13 tcfProduction: 0.04 bcfd
AsiaResource: 203 tcfProduction: 1.32 bcfd
AsiaResource: 203 tcfProduction: 1.32 bcfd
AfricaResource: 83 tcfProduction: 0.0 bcfd
AfricaResource: 83 tcfProduction: 0.0 bcfd
Shale Increasing Attracts Investment Dollars
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Perc
ent o
f L48
CA
PEX
All Other PlaysShale Plays
North AmericaResource: 1,348 tcfProduction: 28.3 bcfd
North AmericaResource: 1,348 tcfProduction: 28.3 bcfd
Middle EastResource: 25 tcfProduction: 0.0 bcfd
Middle EastResource: 25 tcfProduction: 0.0 bcfd
Where is unconventional gas located?
Source: WoodMac
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Where is unconventional gas located?
Source: U.S. Department of Energy
U.S. Shale Gas Basins
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Why did Statoil invest in North American shale gas?
$3.38 $3.63 $3.68 $3.74 $3.79 $3.89$4.59
$5.04 $5.16 $5.30
$6.47 $6.48 $6.78 $6.86
$8.05
$8.87
$10.26
$3.08$3.43
$0.00
$2.00
$4.00
$6.00
$8.00
$10.00
$12.00
Bakke
nEag
le Ford
Granit
e Was
h Hori
z.
Haynesv
ille (C
ore)
Marcell
us H
oriz.
HuronBarn
ett (C
ore)Fay
ettev
illePine
dale A
nticli
ne
Haynesv
ille (E
. TX)
Wood
ford
UintaPice
ance
Marcell
us (V
ert.)
Cotton V
alley
San
dsU.S
. Ave
rage
W. O
klahom
a
Powder
River B
asin
Barnett
(W. E
xtn.)
$ per MMBtu
Marcellus – low break evens
Source: Barcap
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Why did Statoil invest in North American shale gas?
Transforming the world’s biggest energy market:•Energy independence•More viable energy mix•Job and wealth creation for thousands of Americans
0
10
20
30
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90
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030
Conventional Shale Tight CBMSource: Wood Mackenzie
bcfd
US Gas Production by Type
Source: WoodMac
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Why did Statoil invest in North American shale gas?
Strategically positioned
• US unconventional industry is established
− Liquid market
− Existing industrial infrastructure
• Marcellus - world class shale play
− 7420 bcm of recoverable resources (US DoE)
− Attractive break evens
− Close to market and pipeline capacity
New York
Marcellus Area
Cove PointRe-gas terminal
Gulf of Mexico
Pipeline to Canada
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Current status: Statoil’s JV with Chesapeake
• JV with Chesapeake
• Organisation in place
• 50,000 boe/d in 2012
• Now 300,000 mcfd(44,000 boepd)
• 26 rigs in operation
• 118 wells
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The central importance of HSE
• Chesapeake proven track record
• Standards above and beyond
• Aligned on regulation, water management, testing and the disclosure of additives
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Next steps in Statoil’s unconventional gas journey
• Early entrant
• Learn and prepare
• Build infrastructure and competence
• Become a professionalunconventional operator
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Statoil Unconventional Gas
John KnightSenior Vice President, Global Unconventional Gaswww.statoil.com
Thank you