Killer shale

23 August 2010 By Christopher Swann

Shale drilling innovations changed the natural gas game in America. They could do the same elsewhere perhaps undercutting Russian titan Gazprom and the $100 billion trade in liquefied natural gas on which the likes of Exxon and Shell increasingly rely.

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New drilling techniques could allow energy companies globally to access 1,400 trillion cubic feet of natural gas that was previously out of reach, according to consultancy Wood Mackenzie.

This would boost global reserves by a fifth. Russia has the world's largest gas deposits at around 1,570 trillion cubic feet.

The consultancy said that shale gas and coal bed methane resources were spread across six continents, with deposits in China, India, Poland, Germany and France. So far unconventional gas production has largely been confined to North America and Australia.

PFC Energy estimates that the six biggest oil majors will spend $76 billion up to 2020 on developing liquefied natural gas, or about $7.6 billion a year. This is equivalent to around 17 percent of 2009 capital spending.

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