Gazprom's Medvedev Slams Shale

Gazprom's deputy chief executive Alexander Medvedev, has compared the shale gas boom to the internet bubble, “which first blew up enormously and then flattened itself out to some rational and logical size”.

Mr Medvedev predicted that, as with the internet bubble, many shale gas companies would be forced out of the industry.

He continued that bankers have approached Gazprom about exploring investments in North American shales but that Gazprom had no interest in investing in US gasfields, calling the company's current reserves "more productive" than those that could be acquired in the U.S.

Medvedev said some international companies that entered into joint ventures with U.S. firms to learn the technology behind the shale gas revolution had likely overpaid and were receiving "an expensive education."  (Editor's note: One wonders which (all) of CNOOC Ltd., Reliance Industries Ltd., Total SA, and Statoil ASA, Medvedev was directing his comment).

Medvedev told reporters after an investor conference that Gazprom sees U.S. gas prices recovering to between $6 per million British thermal units and $8/MMBtu within the next five years, prices he says would make sending liquefied natural gas shipments to North America profitable.

Gazprom, the world's largest gas producer, had considered North American markets prime targets for exports of liquefied natural gas before the recent boom in production from shale rock formations pushed down U.S. gas prices.