The Middle East may have big deposits of shale gas, the unconventional natural gas resource that has transformed North America's gas market, a senior officer of Partex Oil and Gas said Monday.
The gas increasingly tapped from shale beds in North America and elsewhere occurs in rock formations that are considered the "source rocks" for conventional oil and gas resources, Antonio Costa Silva, Chairman of the Management Commission of Partex, told the Middle East Gas Forum in Abu Dhabi.
"In the Middle East we have plenty of source rocks, so for sure we have plenty of shale resources that can be used for the domestic market," he said.
Conventional geological wisdom holds that oil and gas is gradually released as organic material trapped in shale beds is "cooked" by high underground temperatures and pressures. Much of the oil and gas so formed is thought to migrate from the source rock into other porous rock formations before either finding its way to the surface or accumulating in underground "traps". But some hydrocarbons, especially gas, may remain in the shales where they were formed. Recent advances in drilling technology now allow such gas to be exploited.
The cost of producing gas from shallow North American shale deposits has fallen so far that exploiting the continent's gas shales now competes with conventional gas production. That has sparked interest in the possibility of developing shale gas deposits in other parts of the world. So far, most of that interest has focused on extensive shale formations in China, Russia and Europe.
The Middle East, meanwhile, has been overlooked because of its massive conventional oil and gas deposits. Except in Jordan, which imports almost all the oil and gas it uses and is seeking to exploit shale beds beneath its desert, the region's shale gas potential has not been assessed, Costa said.
That could soon change, as Arab states in the Middle East increasingly seek to satisfy rising domestic gas demand by developing untapped regional gas resources that are not associated with their oil fields. That is important because the region's significant reserves of "associated gas" are needed to maintain pressure in oil reservoirs. Production of the gas is also limited by OPEC oil output agreements.
Ahmed al-Arbeed, CEO of the UAE's Dana Gas, said his company was seeking North African shale gas opportunities, especially in Algeria and Libya.
"We have studied this jointly with the Algerian government," he told the conference.
Bader al-Mohamadi, Senior Vice President (Technical) of Abu Dhabi Gas Liquefaction Company (Adgas), said Abu Dhabi might do well to study its shale gas potential.
"Nothing has been happening in this area, so we have to start," he said. "The demand is huge and the prospects are very good here."
Abu Dhabi, the largest UAE emirate with about 95% of the OPEC member's oil reserves, is scrambling to meet rising domestic gas demand as it diversifies its economy into energy intensive areas such as petrochemicals and heavy industry. Similar situations are faced by most other Persian Gulf states.
Partex, the international oil company founded by Middle East oil pioneer Calouste Gulbenkian, is a partner in Abu Dhabi Company for Onshore Oil Operations (ADCO). The Abu Dhabi National Oil Company unit holds Abu Dhabi's main onshore oil concession.
Dana Gas, based in the UAE emirate of Sharjah, is a regional oil and gas development company listed on the Abu Dhabi Securities Exchange.
