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Its’ All Over: Chevron Abandons Shale Ventures In Europe

Stanley Reed, International New York Times

Chevron said on Friday that it would abandon efforts to find and produce natural gas from shale rock in Poland, in perhaps the biggest setback yet to fledgling efforts to start a European shale oil and gas industry that might help replace the region’s dwindling fuel resources.

Shale development in the United States has been one of the reasons the American energy industry has experienced a renaissance in recent years — so much so that it has contributed to the global glut now depressing oil prices. But Europe, heavily reliant on imported fuel, has had trouble getting started with shale, for geological, environmental and political reasons.

Chevron announced it was abandoning the Poland project the same day the company reported that its earnings for the fourth quarter of 2014 fell nearly 30 percent compared with a year earlier, to $3.5 billion. The company blamed lower oil prices for much of the damage.

Among the international oil companies, Chevron made the largest commitment to shale efforts in Europe, focusing on the east. It drilled several exploratory wells in Poland and Romania, while also signing agreements in Ukraine and Lithuania.

Chevron said in a statement that it would not continue operations in Poland “as the opportunities here no longer compete favorably with other opportunities in Chevron’s global portfolio.” The company said it was still assessing the results of its exploration well in Romania.

Chevron, which had already pulled out of Lithuania, continues to maintain an office in Ukraine. But that operation is at an impasse with the government in Kiev.

Chevron’s withdrawal from Poland reflects the pressures on all oil companies to trim spending after the recent 60 percent fall in oil prices. But efforts in Europe also have been frustrated by obstinate geology and stiff public opposition on environmental grounds. […]

Over all in Europe, the shale story is one of much talk and little action. In Britain, where the government of Prime Minister David Cameron has tried to kick-start the industry, drilling efforts have run into the skepticism of local planning departments as well as occasionally vociferous protests.

France, which has promising geology, has kept a ban on fracking. Germany, also considered a potential shale center, has not yet agreed to allow the exploration necessary to confirm whether the country’s geology is as promising as hoped.

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