Oil major ExxonMobil Corporation (XOM) and Turkey’s state energy company TPAO met recently to discuss shale gas exploration prospects in that country.
Per the early 2011 study conducted by the U.S.government, Turkey is believed to hold about 15 trillion cubic feet of technically recoverable shale gas. TPAO considers its partnership with ExxonMobil helpful in exploring gas in a more efficient manner.
Currently, ExxonMobil is contemplating the potential at Trakya, in western Turkey. Based on the outcome of the prospects in the region, the company intends to take its decision of whether to proceed or not.
TPAO has already inked a similar deal with Europe’s largest energy company Royal Dutch Shell plc (RDS.A) in November 2011. Per the agreement, Royal Dutch Shell will help TPAO to search for oil and gas in the Mediterranean and southeastern Turkey, with the key focus of the former being development of gas deposits near the southeastern city of Diyarbakir.
An analysis on global shale gas prospects in April 2011 conducted by Advanced Resources International (ARI) for the U.S.government established Turkey, France, Poland, Ukraine, South Africa, Morocco and Chile as countries with immense potential for supply enhancement using shale.
According to the ARI study, the Anatolian Basin in the southeast and Thrace Basin to the west of Istanbul were recognized as the key potential areas of shale gas production in the country.
Energy companies had once rushed to search for unconventional oil and gas production methods, when they felt that demand was high. This resulted in huge reserves of natural gas through a technique called fracking. The outcome was ample supplies that reduced prices globally.
Given its large base, achieving growth in oil and natural gas production has been a challenge for ExxonMobil over the past several years. With the established oil-producing regions of Europe and North America well beyond their prime, the search for growth has pushed the company into riskier regions.
ExxonMobil holds a Zacks # 3 Rank, which translates to a Hold rating for a period of one to three months. For the long term, we maintain our Neutral recommendation.
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