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American entity Liberty Resources will help Imperial Energy, a subsidiary of ONGC Videsh Ltd, to exploit shale reserves in the latter’s asset in the Tomsk region of Western Siberia, Russian Federation.
Imperial, which has been experiencing a dip in output, has identified a new area in its block which has Bazhenov shale formation.
According to reports, the Bazhenov shale formation is said to be world’s single biggest shale oil reserve.
This formation is tipped to do for Russia what Bakken Shale did for the US, and change the global energy portfolio. N.K. Verma, Director (Exploration) ONGC, said “Liberty Resources is our service partner with initial understanding for win-win business model based on outcome of the pilot. We expect positive results.”
International practice is that in a ‘service contract’, the payment is made in accordance with the work rendered.
Verma told Business Line that Liberty Resources would come with its technology required for exploiting shale reserves.
Global leaders
Denver-based Liberty Resources is said to be one of the global leaders in hydro-fracturing technology, essential for shale oil/gas exploration.
This technology involves the use of water pressure to create fractures in rock that allow the oil/ natural gas it contains to escape and flow out of a well.
This process takes places under tight regulatory control.
A major part of Imperial’s reserves is in tight formations, and to exploit this to its full potential the company needed a technology partner.
Imperial had floated expression of interest in 2012 for selection of a technology partner.
According to OVL, during fiscal 2013 production of Imperial Energy was 0.631 million tonnes of oil equivalent (oil and gas) compared with 0.771 million tonnes of oil during fiscal 2012.
The production in fiscal 2013 was lower as Imperial took a one year drilling holiday to search for optimal and economically feasible technologies of oil recovery from tight reservoirs, OVL said.
In January 2009, OVL had acquired Imperial Energy Corporation, an independent upstream oil exploration and production company, at a cost of $2.1 billion.
The company had come in for severe criticism when the output from fields owned by Imperial saw a decline.
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