Written
by Chloe Marie – Research Fellow
The Global Shale Law Compendium
series addresses legal developments and other issues related to the governance
of shale oil and gas activities in various countries and regions of the world.
In this article, we will highlight governance actions taken by countries in
northern Africa, including Tunisia, Morocco, Libya and Egypt, to develop
policies specific to shale gas development. Last week’s article addressed
relevant developments in Algeria.
Tunisia:
In
September 2015, the U.S. Energy Information Administration (EIA) issued a report stating that
Tunisia holds approximately 22.7 Tcf of technically recoverable shale gas
resources, which are located in the Ghadames basin in southern Tunisia. The
report also noted that additional resources might exist in the Pelagian basin
in eastern Tunisia. Shale gas development in Tunisia is still at an early stage,
and the reserves have yet to be proven commercially viable. The Tunisian
authorities, however, consider the reserves to hold a great deal of potential
given the fact that conventional hydrocarbon production is in decline while
domestic energy consumption is increasing.
Despite
hydraulic fracturing having been used in the past for the development of
conventional reservoirs, Tunisia has not had regulations specific to shale gas
development using such technique. Thus, exploration and/or production of shale
gas resources has been subject to the legislation applicable to conventional
oil and gas activities, including the 2008 Hydrocarbon Code. In order to
attract investment and create good business environments, the Tunisian
government recently presented a draft proposal to the unicameral Parliament -
also called the Assembly of the Representatives of People - amending the
Hydrocarbon Code to address the terms and conditions for unconventional
exploration and production. The Tunisian Parliament adopted the draft proposal
in April 2017.
Nonetheless,
even though shale gas development appears to be moving forward, the Tunisian
people have demonstrated major opposition to such development expressing
concerns about the potential impacts on the environment and the absence of
public participation in the decision-making process. Opposition to shale gas
development dates back to 2010 when the public discovered that the government had
issued exploration permits for shale gas resources to Perenco Tunisia and Cygam
Energy without transparency in the permit granting process. Indeed, the U.S.
EIA revealed that Perenco
Tunisia and Cygam Energy conducted well testing operations at shale gas
reservoirs in southern and central Tunisia, but the government denied these
allegations. In November 2012, the government issued permits to Royal Dutch
Shell for shale gas exploration without any public involvement, again giving
rise to controversy.
In
2014, the Tunisian government led a series of studies on the country’s gas
extraction capability and recently announced, in January 2017, that it would
further investigate the issue of the environmental impact of shale gas
development in Tunisia. The results of this study are expected summer 2018.
.
Morocco:
The
U.S. EIA has estimated the technically
recoverable shale gas reserves in Morocco at approximately 12 Tcf located in
the Tindouf – also known as the Zag basin – and Tadla basins, respectively in
southern and central Morocco. In early 2015, Gulfsands Petroleum, a UK-based
company, announced it discovered
new reserves within the Rharb Centre Permit in northern Morocco. Just like
Tunisia, Morocco has recently started to take more interest in the development
of shale gas resources.
During
the year 2010, the Moroccan Office National Bureau for Hydrocarbons and Mines
(ONHYM) carried out preliminary work focused on the potential of shale gas
development in Moroccan basin and the results were promising. Many foreign
companies have expressed a great interest in exploring shale gas resources,
including Anadarko Petroleum, Repsol, EOG, East West Petroleum Corporation, and
Circle Oil, and acquired prospective permits from and in partnership with the
ONHYM. Most of the companies conducted several geological studies and seismic
surveys, however, in June 2015, the Irish explorer Circle Oil announced having
reached a stabilized flow rate of 1.9 million cubic feet per day after drilling
its well in the Lalla Mimouna permit area. This development encountered
significant opposition from the local population due to concerns over the
impacts of the use of hydraulic fracturing on already-scarce water.
Legally
speaking, the Moroccan Hydrocarbon Code applies to both conventional and
unconventional resources. There have been ongoing discussions, however, within
the Moroccan government and the ONHYM to create a specific legal framework
relating to shale gas development.
Libya:
Libya
is the fourth largest oil producers worldwide and a major supplier of oil and
natural gas to the European Union. As a result of the 2011 uprising against the
Al-Qaddafi regime, however, global oil and natural gas production and energy
exports have decreased dramatically. In 2012, in hopes of reviving the Libyan
hydrocarbon market, the National Oil Corporation (NOC) Chairman Nuri Berruien declared that “gas has
never been a priority for us, but it is now” and acknowledged the need to
explore options regarding shale gas development.
Shale
gas deposits in Libya account for approximately 122 Tcf of technically
recoverable shale gas and are located in three basins: the Ghadames basin in
western Libya, the Sirte basin in central Libya, and the Murzuq basin in
southwestern Libya. The U.S. EIA also reported the presence of
potential shale gas resources in the Kufra basin; though they may not be recoverable.
At
present, the Libyan government is still seeking foreign investments for shale
gas exploration and production activities. Such activites have not yet started,
primarily due to an unstable economic and legal climate. Interestingly, the NOC
Exploration Manager stated in 2013 that “to
have a petroleum law, you need to have a constitution first … You cannot have a
law without a constitution.”
Egypt:
According
to the U.S. EIA, Egypt holds 100
Tcf of technically recoverable shale gas in four basins, namely the Abu
Gharadig, Alamein, Natrun and Shoushan-Matruh, all located in the western
desert. Compared to Libya, Morocco and Tunisia, Egypt has made the furthest
strides in the development of its shale gas resources. Royal Dutch Shell,
together with Apache Corporation, successfully completed shale gas
production tests from the Apollonia field in the western desert in June 2016. Furthermore,
in December 2016, Apache Corporation announced it would invest
$100 million into the drilling of 20 hydraulically fractured wells in the
Apollonia field with the expectation of producing around 40 Mcf per day of
natural gas.
Egypt
does not have specific regulations regarding shale gas development; thus, such
development is subject to the legislation applicable to conventional
hydrocarbon resources, namely the Mining and Quarries Law No. 66 of 1953 and
the Natural Resources Concession Law No. 61 of 1958.
Prior articles in the Global Shale
Law Compendium series:
No comments:
Post a Comment