Shale Gas - Energy and Climate Change Contents


Memorandum submitted by ExxonMobil

As discussed, ExxonMobil is developing new tools and techniques for finding and producing gas resources, both conventional and unconventional, in Europe. We believe that unconventional resources will increasingly contribute to European supply, expecting to grow to ~5 BCFD or about 10% of total supply by 2030.

ExxonMobil has been steadily increasing our position in unconventional gas resources by focusing on securing access to high-quality opportunities worldwide. Following the completion of ExxonMobil's merger with XTO, the company is moving forward with the creation of a new organization to focus on global development and production of unconventional resources.

In Poland ExxonMobil Exploration and Production Poland (EMEPP) has now safely completed drilling the Krupe-1 shale gas well in the Chelm concession in southeast of the country. The well spudded on 3 December 2010 and reached a target depth of 3,807 meters. On 20 February 2011 drilling commenced on the Siennica-1 well, and is expected to last for 10 weeks.

Further operations at both wells, including a decision if fracing will be conducted, are dependent upon an analysis of drilling results.

EMEPP has also safely completed 3D seismic surveys in the Miñsk Mazowiecki, Wolomin and Chelm areas. We have commenced shooting seismic in the Werbkowice concession. 3D seismic acquisition is a low environmental-impact, temporary activity and all activities are conducted in a way to respect and protect the local communities, wildlife and the environment. The programs incorporate ExxonMobil's global best practices to ensure the environmental footprint is minimal and temporary, and complies with our permits.

With regard to your question on regulatory regime, ExxonMobil supports stable and sensible policies that will allow unconventional gas to compete on a level playing field. This will help increase production and secure supplies of reliable, affordable energy to help boost the economy. Due to the relative lack of equipment and personnel in Europe for large-scale unconventional exploration and development, it will be important that there are no undue restrictions on the import of equipment and/or services into the EU, or the ability to move these quickly from one country to another within the EU.

Operators are likely to ask for larger, unproven development areas in their production licenses than for conventional resources, due to the inherent nature of unconventional resource basins. Regulatory amendments will need to take this into account. Environmental regulations may need to be amended to account for issues associated with accessing large tracts of land with large volumes of equipment, as well as to manage water use during operations in an environmentally responsible manner.

Extended pilot phases (potentially lasting years, not months) that produce gas on a smaller scale than full development are distinct possibilities.

These pilots may require innovative local solutions, such as supplying local communities through small, newly built distribution systems or using portable gas-fired electrical generation stations to supply local communities directly through the existing grid. All of this may require regulatory amendments.

As previously offered, we would be delighted to meet with Chairman Yeo to discuss both shale gas regulation and our activities in Poland.

April 2011



 
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Prepared 23 May 2011