Friday, March 29, 2013
Exxon discussing fracking with German authorities
Story originally appeared on Market Watch.
Exxon Mobil Corp. XOM +0.03% has been discussing hydraulic fracturing with German regulators and communities as it looks at future exploration in the country, the company said in its 2012 financial and operational review released this week.
“Future exploration activities await the outcome of ongoing discussion with regulators and communities on the subject of hydraulic fracturing,” Exxon said in the document.
Exxon is Germany’s largest natural-gas producer, with Exxon-operated fields accounting for about 70% of all natural gas produced in the country. It holds nine exploration licenses in Germany, covering 2.8 million acres with shale gas, tight liquids, and coalbed methane, the company said.
Germany does not have an official ban or moratorium on hydraulic fracturing, or fracking, unlike countries such as France and the Netherlands.
Exxon’s “ultra cautious” comments, however, imply an informal policy more restrictive than markets realize, analysts at Raymond James said in a note Thursday to clients.
Chancellor Angela Merkel said earlier this year the country should be careful about it since Germany is more densely populated than the U.S. Germany’s environmental minister has said he wants to limit fracking and even ban it in certain areas.
Exxon is likely committed to Germany and the negotiations as three of its nine licenses were added in 2012.
The financial and operational review also offers more windows into Exxon’s far-flung empire, and puts them in more perspective.
For instance, Exxon acquired 192,000 net acres in the Bakken shale formation, increasing its position there by nearly 50%.
At the end of 2012, it completed its fifth acquisition in southern Oklahoma since 2010 — Exxon expanded its presence in the liquids-rich Woodford shale to more than 270,000 net acres.
Production there more than doubled in 2012 to about 19,000 barrels of oil equivalent a day from less than 5,000 barrels in 2010.
Output at Woodford and other shale areas in the Marietta Basin to the southwest could grow to more than 150,000 barrels of oil equivalent a day, Exxon said.
Exxon didn’t neglect conventional plays. It also increased its presence in offshore Gulf of Mexico by nearly 400,000 acres, participating in two lease actions there.