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Betting on Mediterranean Shale: 3 Plays, 1 Winner

By: OilPrice.com | Monday, January 28, 2013

The Mediterranean has joined the shale game, but as most of Europe's Mediterranean countries drag their feet, all eyes are on Israel, Turkey, and Algeria.

For Israel, it will be a slow road without the majors.

For Algeria, it's full speed ahead, in theory--but the foreign interest is just dabbling for now due to a lack of shale infrastructure.

For Turkey, the situation is more promising thanks to a renewed interest by the majors and a near-perfect blend of good governance and attractive fiscals.

Here's what the playing field looks like:


Turkey

Turkey is the best bet here. In Turkey, it's all about the Dadas Shale, in which the majors have recently expressed a renewed interest, making the game immediately more promising for the North American juniors who are betting heavily on this play.

The Dadas Shale is being compared to Texas' Eagle Ford shale and Oklahoma's Woodford shale in both size and potential. What is that potential? Well, those who are investing in it say it has more than 100 billion barrels of original oil in place.

While nothing's being produced, testing is about to begin and new technology has the majors and juniors highly optimistic.


Positives


Negatives


Israel

Some think Israel is on the verge of a major energy revolution because of the combination of shale discoveries and a recent conventional natural gas discovery (16 trillion cubic feet).

While Israel doesn't have much by way of heavy oil, it does have world-class shale oil resources.

Shale can contain both natural gas and oil, and in terms of oil, Israel's shale plays put it in third place vis-à-vis expected volume, behind the US and China (but ahead of Russia).


Positives


Negatives


Algeria

Algeria--suffering from a decline in conventional production and foreign investment interest recently--has dived right into shale with its state-backed energy firm, Sonatrach. In fact, Algeria seems to be solely focusing on shale now and all its efforts are directed at attracting foreign partners to its shale plays.


Positives


Negatives

So where do you put your money? Turkey - no contest. This is a combination package that includes good governance, good fiscals, brilliant infrastructure and a clear pay off as soon as the juniors and majors strike shale. This is a solid, long-term play whose importance to Turkey's overall energy ambitions cannot be understated.

 


Source: http://oilprice.com/Energy/Natural-Gas/Betting-on-Mediterranean-Shale-3-Plays-1-Winner.html

By Oilprice.com Analysts.

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Author: OilPrice.com

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