Wednesday, April 4, 2012

Chevron promises care in developing Romania shale gas

(Reuters) - Chevron Corp, responding to environmental fears over its shale gas plans in Romania, said on Tuesday it had yet to start exploration and would keep to seismic data surveys for 12 months while persuading local people the technology is safe.

It would then consider beginning actual gas exploitation on the Black Sea coast only after a further five years of exploration.

So far protests against the major U.S. energy company's plans have involved only some thousands of people in Romania, where the centrist government has awarded Chevron exploration rights for three blocks of 670,000 acres in Constanta province by the Black Sea last month.

It has a separate license in the eastern county of Vaslui to explore 1.6 million acres.

But neighboring Bulgaria as well as France have halted all exploration for shale deposits due to environmental concerns, while Britain stopped drilling last year after exploration caused a minor tremor in northwest England.

"We understand the concerns related to natural gas exploitation from shale formations in Romania," said Tom Holst, Country Manager Chevron for Romania.

"We believe that by presenting factual information on how these technologies are conducted, Romanians will understand that this natural gas is a clean source of energy and that it can be produced safely and responsibly," Holst said in a statement.

Europe is keen to find ways to diversify its gas supplies away from reliance on Russia but is divided on shale gas - natural gas locked in rock formations that have been found in abundance around the world in the past decade.

The gas is extracted by hydraulic fracturing, known as fracking, which involves injecting water mixed with sand and chemicals into shale at high pressures, a technique some critics fear pollutes underground acquifiers and harms the environment.

Bulgaria banned fracking for shale oil and gas following widespread protests and cancelled an exploration permit it had granted to Chevron.

Holst said the planned survey in Romania would provide safeguards.

"Such a survey will be designed and permitted to avoid areas of high cultural value, cities and villages and sensitive environmental habitats," Holst said.

"Only after such a survey is completed would consideration be made to locate and permit a standard exploration well," Holst said about Chevron's operations in Constanta.

Holst said that an exploitation project on the Black Sea shore "would be a consideration after the exploration activity, which is to be conducted over a five-year period."

Holst said Chevron was in the initial permitting process for a conventional exploration well in the eastern county of Vaslui on the border with Moldova.

Specific estimates of the size of shale gas reserves in Romania do not exist yet, but the U.S. Energy Information Administration (EIA) has said the joint reserves for Romanian, Bulgarian and Hungarian shale gas was around 538 billion cubic meters (bcm).

This would be around half of Ukraine's estimated resources.

(Reporting by Radu Marinas; Editing by Anthony Barker)

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