Dutch Treat: Unconventional Gas Prospects in Holland

The Netherlands has its own domestic conventional gas supplies, but with those set to diminish in the coming decades, seizing upon unconventional gas opportunities there looks like a coming attraction.

Characterizing that situation, According to Berend Scheffers, Director of Technology at EBN, who spoke before delegates at Shale Gas World Europe 2011, not developing Holland’s unconventional gas presented a risk.

He said: “If we do nothing in the North we will end up being a gas importer about 10 years from now. We have per inhabitant the largest gas infrastructure network. From a consumption point of view we are one of the two largest gas consumers – 45% of our energy comes from gas - and approximately the fifth largest in terms of volumes in Europe.”

He said EBN was a state owned company that participated in almost all oil and gas exploration in the Netherlands, adding that it had daily production of 3000 million cubic feet of gas per day and was active onshore and offshore.

The country’s main field for gas, Groningen, was located in the northern part of the Netherlands. “The rest comes from small fields.”

Because the large conventional field was depleting, it also presented a risk for gas storage developments there.

 “If there’s a stronger driver to go for shale gas, it’s something like this,” he said, showing a graph of Dutch gas revenue, which he said contributed a considerable amount to the state budget.

“We expect this year to have a nice income from natural gas,” he added, but showed the decline in production and a rise in demand predicted for 2009-2035, so we need an aggressive program to get more gas out of the Dutch subsurface.”

Scheffers said his company had stated the ambition two years ago to produce 30 BCM of gas by 2030 from its small fields.

“We have a gap,” he explained, “and have an extensive program to fill that gap, field life extension out of new technology. We think there’s a lot of potential in new fields.”

He reported that EBN was conducting an 8,000 square kilometer seismic survey offshore, north of Dutch territory.

“Also unconventional gas might be a part of the solution, but we only expect it to contribute in the latter half of this decade to the full extent,” said Mr. Scheffers.

He said EBN had some companies evaluating Dutch shale plays. “Because of conventional drilling in the Netherlands, we have loads of core and data for both onshore and offshore, which can be easily accessed. We did a lot of analysis and two main plays came up: Jurassic play and in the southern part of the Posidonia formation, where some companies have received licenses; and a deeper carboniferous play just traveling along the Dutch border with Belgium and German – not many well penetrations have taken place there so far.”

According to him, if all the figures together technically recoverable gas resources from shale in the Netherlands were approximately 500 BCM. “That’s not extreme,” he commented, “but there really is some potential in those areas.”

Scheffers mentioned a caveat for shale gas E&P in Holland.

“Of course the Netherlands has a low-lying delta with a lot of population, so a lot of the area is not very accessible,” he explained, mentioning factors like military areas and shipping lanes. “You have everything here. Even with all this, we find possibilities to develop fields and industrial activities, but it will be very difficult.”

“We need public acceptance, proper regulations for companies so they know they can proceed without delay,” he said of potential shale gas activities in the Netherlands.

“It’s also about transparency and communication; and innovation – using a well pad as small as possible with transport as efficient as possible.”

Mr. Scheffers returned to the public acceptance issue.

“People not only need proper information but a feeling of trust in the company carrying out activities but also in their local political situation, in provincial politics they need to have some kind of ‘procedural justice’, see that they are influencing the licensing activities. They want to have some kind of distributional justice: ‘what’s in it for me?’”

He reported how the government was handling the issue: “In Dutch parliament they’ve asked the minister to carry out an examination: They want to know if it is safe and not bad for the environment, but we do this without a moratorium.”

“We as an industry can state that our intention is to have a safe development of shale gas in the future of Europe,” said Scheffers, offering the US “FracFocus” website as a good example of transparency for Europe’s shale gas industry.