Fracking has been around in various forms since the late 1940's and there must be hundreds of thousands of wells throughout the world where hydraulic fracturing has been used to increase oil production. Fracking here, in the UK, fracking there in France and Germany and fracking everywhere, including Russia where it has been used in the oil industry for years.

The big story developing internationally of course is how to use the current generation of shale technology to increase oil production. If it happens in places like the Permian, Bakken and Utica, it can technically be made to happen in the UK, France and for example West Siberia:

Russian Prime Minister Vladimir Putin on Thursday approved a package of stimulus measures to unlock vast untapped unconventional oil resources in Western Siberia that could boost Russian oil production by up to 2 million barrels per day.

The proposals would encourage investors in Russia, whose status as the world's top crude producer is threatened by falling conventional output at Soviet-era fields, to expand use of costly hydraulic fracturing and other chemical enhanced recovery methods.

"Fracking," which brought a boom in U.S. unconventional oil and gas output, is already in use at some fields in Western Siberia, the Soviet-era oil heartland, but has yet to open up the so-called tight oil targeted in the proposals.

"This will open a second life for Western Siberia. The impact on Russian oil output will be very significant," Deputy Energy Minister Pavel Fedorov said after Putin signed a decree ordering the government to refine the package of stimulus measures by Oct. 1 and turn them into legislation.

"The potential is pretty substantial from learning how to produce from tighter formations. There is a grey area between tight rock formations and formations in west Siberian regions which produce today."

This was also foreshadowed by the recent Rosneft/ExxonMobil activity. This will be very interesting. Putin was pushing shale gas as environmental tragedy as little as two months ago.

Bad for gas, but good for oil? You can't have it both ways. Once Russia discovers, as the US has, that fracking for oil is far more productive, and profitable, expect the tune to change.

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  • Striebs

    Thanks for keeping us informed Nick .<br /><br />That quote gives the impression that the Russian Deputy Energy Minister knows what is best for Russia .<br /><br />A stark contrast with the rest of Europe which seems to be disappearing up it's own backside and panicking in the complete absence of credible leadership .<br /><br />Looking forward to your analysis of the leak via Das Spiegel that German ministers are very sceptical about frac'ing .

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  • adamnb

    In reply to: Striebs

    "Halliburton (NYSE: HAL) has signed a Strategic Cooperation Agreement with Gazprom International for the development and implementation of new oil and gas technologies in global exploration and production projects.<br /><br />The technologies will address areas including tight gas, deepwater, advanced software applications and integrated workflows. (Oil&Gas Eurasia)

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  • Exactly right, Striebs - Europe is dithering and dragging its feet, looking for any excuse to stay with the status quo.<br /><br />There are some extraordinary articles and reports circulating about the prospects for the US. They include predictions of massive "onshoring" of all sorts of manufacturing, predicated on plunging US power and feedstock prices, aided by rising labour costs in China, higher US productivity and improved security of supply chains.<br /><br />If only a fraction of the forecasts come to fruition, it is going to be grim for European companies. They have no chance of competing when paying twice as much for power, 3-4 times as much for key feedstocks and up to 5 times as much for gas. The farmers will be hammered too due to similar disadvantages in the cost of fuel and fertiliser.

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  • Striebs

    In reply to: Mike Higton

    Europe is fast becoming uninvestable . Companies are going to give it a wide berth .<br /><br />You can no longer count on regulatory or legislative stability .<br /><br />South Africa , for all it's many and far more serious problems , is actually making a fist of it . <br /><br />They have put the ANC youth leader in his place and resisted calls to nationalise industries unlike Argentina which has nationalised YPF .<br /><br />Odds on they will make the tough , correct call with regards to exploiting Karoo shales and tight gas and address the power outages which hold the country back .

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  • Bob

    "Halliburton, Gazprom International to Collaborate on Technical Exchange And Technology Deployment<br />Halliburton (NYSE: HAL) has signed a Strategic Cooperation Agreement with Gazprom International for the development and implementation of new oil and gas technologies in global exploration and production projects.<br /><br />“We expect that cooperation with Halliburton will extend our engineering capability, improve Gazprom International’s competitive performance, and broaden the range of our possibilities in the areas of exploration and development of hydrocarbons.”<br /> <br />The agreement sets the framework for the ongoing exchange of information related to oil and gas technologies, for technical training to be provided to Gazprom International by Halliburton, and for the deployment of Halliburton technology on Gazprom International projects.<br /><br />The technologies will address areas including tight gas, deepwater, advanced software applications and integrated workflows.

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