Chevron Corp said it will give up shale gas exploration plans in Romania, after an assessment showed the Black Sea state does not compete favourably with other investment opportunities.
Energy firms have been attracted by estimates of massive shale gas reserves in Poland and Romania. Last month, the U.S. energy major took a similar decision to discontinue its operations in Poland.
“Chevron intends to pursue relinquishment of its interest in these (Romanian) concessions in 2015,” Kent Robertson of Chevron said in an email to Reuters.
“This is a business decision which is a result of Chevron’s overall assessment that this project in Romania does not currently compete favourably with other investment opportunities in our global portfolio.”
Chevron, the fourth-biggest American corporations and second-biggest among the six “supermajor” oil companies, announced on 2 April 2012 that it was suspending its activities in respect to the exploration and extraction of shale gas in Romania, due to concerns related to hydraulic fracturing.
The US Energy Information Administration has estimated Romania could potentially hold 51 trillion cubic feet of shale gas, which would cover domestic demand for more than a century.
Shale gas is an 'unconventional' fossil fuel that is found within natural fissures and fractures underground. Until recently, no method of safely transporting it to the surface existed.
However, by pumping water, sand and chemicals into rock formations under high pressure via a technique known as hydraulic fracturing or 'fracking', energy companies believe they have found a part of the answer to Europe's energy security problems.
The method remains intensely controversial because of its possible environmental risks, including poisoning groundwater and higher greenhouse gas emissions than traditional gas.
To proponents, shale gas represents a hitherto untapped and welcome alternative energy source to traditional fossil fuels. At the moment the continent depends on gas imported from Russia, and disputes between that country and Ukraine have disrupted winter supplies in recent years.
In the US, shale gas already accounts for 16% of natural gas production and some analysts predict that could rise to 50% within 20 years.