Why the further development of gas-oil field Petišovci is important?
- It represents a competitive advantage for the local economy,
- it promises to increase tax revenues at the local and state level,
- new opportunities for the development of local entrepreneurship and economy,
- transfer of knowledge,
- a good example for new potential investors,
- ensuring greater energy independence of Slovenia.
- Geoenergo, d.o.o. (‘Geoenergo’), is a joint venture company, 50% owned by Petrol, d. d, Ljubljana and 50% owned by Nafta Lendava, d. o. o. (‘Nafta’). Petrol is Slovenia’s largest company and the main supplier of petroleum products in Slovenia with annual sales of some €4 billion. Petrol main business is oil and gas trading, electricity trading and energy and environmental solutions. Nafta is a state owned company active in treatment of waste water, fire prevention services and petroleum storage products. A concession contract granted by the Republic of Slovenia, in 2002, gives Geoenergo exclusive rights to exploit mineral and hydrocarbon resources in an area in the Mura Depression, where the Petišovci field lies. This area has been an oil and gas producing region since the 1940s. Geoenergo currently produces oil and gas from the concession area but as there is no possibility to clean the gas up to national pipeline operator specifications, the gas produced is sold directly to companies locally and to INA, d.d. From November 2017 the production and sale of gas began also to Croatia (INA, d.d.), which is an important step forward, to the increased production of gas from Petišovci.
- Ascent Resources plc (Ascent) is an oil and gas exploration and production company headquartered in London, United Kingdom, and listed on the AIM market of the London Stock Exchange (LSE:AST). Since it was founded, Ascent’s portfolio has consisted of predominantly European onshore projects. Today, the company’s principal asset is the Petišovci & Dolina tight gas project in Slovenia which it considers to be an outstanding prospect. Ascent manages joint operations in the Petišovci & Dolina tight gas project through two wholly-owned subsidiaries, Ascent Slovenia Limited and Ascent Resources, d. o. o. Ascent Slovenia Limited is a partner in the joint venture with Geoenergo, the holder of the exploitation concession in which the Petišovci project lies. All operational activities that are approved by Geoenergo are undertaken by Ascent Resources d.o.o. Ascent’s experienced management team is supplemented, as the need arises, with regional technical and operational expertise to ensure the highest standards are met and delivered on the project. Work is carried out using modern techniques, the application of leading-edge technology, where applicable, and incorporates recent advances in operational management. Ascent and its partner are committed to the highest standards in technical, social responsibility, environmental, health and safety compliance.
- (‘Geoterm’) is the owner and operator of certain infrastructure on the concession and has been appointed by the JV partners as the Field Operator. Geoterm is a wholly owned subsidiary of Petrol d.d., Ljubljana, engaged in drilling, processing and the transportation of natural gas as well as the management and development of geothermal district heating systems. In its role as the Operator, Geoterm will undertake the following works and services for the joint venture, in compliance with government mining regulations: operation of the infrastructure, well design, drilling, procurement of materials & equipment and permitting. Geoterm may also undertake geological studies, reservoir analysis & engineering, petroleum economics, well control, geosciences and development & production design as appropriate. As part of the Petrol Group, Geoterm is committed to socially and environmentally responsible work practices.
Frequently asked questions
What difference will this project make to the local and national economies?
An increase in natural gas production in this area could contribute not only to the development of the local economy but also to Slovenia's energy independence. This is an opportunity for the energy industry in Pomurje to regain its momentum, which, in turn, could have a positive impact on businesses throughout the region.
How long has natural gas been produced in the Mura Depression?
Natural gas and oil production has taken place continuously in this area since 1943. To date 590 million standard cubic metres (Sm3) of gas has been produced. During this time more than 160 wells have been drilled and the first hydraulic stimulation was carried out as early as 1956. Since then, it has been carried out on around 50 wells and no negative environmental impacts have been detected. Please see the Operations History page for further information.
Do you produce gas in the same way as in the USA and as we have seen on TV?
Gas production operations, in the USA and elsewhere, that have been seen in the news involve hydraulic fracturing of shale rock, by drilling horizontal wells, using high volumes of fluid, up to 10,000 cubic metres of fluid per fracturing stage. This is known as high-volume hydraulic fracturing (i.e. 'fracking'). Gas in the Petišovci field is trapped in porous sandstone formations and is produced by hydraulic stimulation in vertical wells using low volumes of fluid, between 100 to 500 cubic metres of fluid per stimulation. This is known as low-volume hydraulic stimulation. Low-volume hydraulic stimulation of sandstone, as used in Petišovci, and high-volume hydraulic fracturing of shale are not just different in terms of the types of rock and the volumes of water used. There are other major differences including the depth of the gas reservoirs, the many layers of impermeable shale between the reservoirs and the water courses, and in the number of fracturing operations per well. Further details and a comparison table can be found on the Protection of Underground Waters page. See also the Safe Gas Extraction page. The European Commission recognises that high-volume hydraulic fracturing 'raises specific challenges, in particular for health and environment' and it issued Recommendations to member states on 22 January 2014 on minimum principles for its use. It has not identified low-volume hydraulic stimulation as carrying the same level of risk.
Which laws govern your operations?
Operations at Petišovci must comply with Slovenian legislation and regulations on health, safety and environmental matters such as water, nature conservation etc. The most important are the following: the Waters Act, the Environmental Protection Act, the Nature Conservation Act, the Mining Act and their relevant regulations. In July 2014 the Slovenian government issued a new 'Decree on environmental encroachments that require environmental impact assessments' which made the Environmental Impact Assessment far more demanding. With these new regulations, Slovenia's criteria for hydraulic stimulation operations are more stringent than the European Commission's recommendations. Our operations are continually inspected by inspectors from the relevant ministries to ensure they comply with these laws and regulations. For further information please see the Regulation and Compliance page.
Does hydraulic stimulation cause earthquakes?
The Seismology and Geology Office of Slovenia's Environment Agency has not recorded any earthquakes or seismic incidents in the Petišovci area to date. Based on 70 years' experience, the likelihood of seismic activity as a result of operations at Petišovci is very low. Any seismic activity that did occur would probably be of negligible intensity and duration, falling into the category of a natural micro seismic phenomenon that would not be felt on the earth's surface.
How much water is used in hydraulic stimulation?
The hydraulic stimulation of sandstone in NE Slovenia uses between 100 and 500 m3 of water. This is approximately 20 times less than is used in hydraulic fracturing of shale. The European Commission guidelines consider that the use of 1,000 m3 or more water per fracturing stage or 10,000 m3 or more water during the entire fracturing process is 'high-volume hydraulic fracturing'. The average volume of water used in our hydraulic stimulation operations in wells Pg-10 and Pg-11A in Petišovci amounted to 265 m3 per stimulation and the wells were stimulated 2 and 3 times respectively. The total volume of water used per well was 655 m3 and 674 m3, respectively, which is comparable to the annual water consumption of three Slovenian households. These are low-volume operations. For further information please see the comparison table on the Protection of Underground Waters page.
What does your hydraulic stimulation fluid contain?
In all five fracture stimulations of the Pg-10 and Pg-11A wells, the composition of the fluid used was: 93.8% water, 5.9% KCl (potassium chloride to stabilize swelling clays) and just 0.3% other chemicals. The water came from the local water supply and the chemicals were all supplied with Safety Data Sheets in accordance with the latest EC Regulation on the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH). No chemical additives classified as toxic (code T) or very toxic (code T+), according to REACH legislation, were used. The exact composition of the fluid has been made available to the environmental and mining inspectorates.
What happens to the fluid that has been used in hydraulic stimulations?
The pressure that is released as a result of hydraulic stimulation forces the fluid back up the tubing in the well to the surface (flow-back) where it is collected in a mud pit ready for removal and disposal by an authorised waste management company. See Stage 4 on the Safe Gas Extraction page.
What is the risk of contamination to drinking water?
The design and construction of the wells combined with the geological makeup of the area make the risk of contamination to drinking water very low. In the Mura Depression gas is trapped in sandstone formations with many layers of impermeable shale above, acting as a natural barrier between the stimulated layers and the aquifers. As a result, drinking water is extremely well insulated from contamination. In the decades of low-volume hydraulic stimulation of the sandstone in the area, no contamination of a drinking water aquifer by gas or fluids has been reported. Further information can be found on the Protection of Underground Waters page.
Will there be an increase in truck traffic once production starts?
Once production starts, gas will be transported through a pipeline to a processing plant, so no trucks will be involved. By-products of processing are liquefied petroleum gas (LPG), condensate and crude oil. Of these, condensate and crude oil are already transported from the processing plant to the nearest refinery in Hungary using approximately one truck a week. Once the new central gas processing plant is built, two or three trucks daily will drive from the site. In the event of drilling a new well, approximately 15 trucks are needed to transport equipment to the site. Once the equipment is delivered the trucks leave the well site. When all the drilling and completion works are finished, the trucks return to remove the equipment from the site. During drilling or other operational works, approximately one truck a day is used to bring regular supplies to the site.
Will further gas production from this project cause any changes in the environment?
The Joint Venture partners commissioned the Geological Survey of Slovenia to produce a report on the potential impacts on the Environment from operations in the Petišovci field. Their conclusion was that our operations would not adversely affect the environment to any significant level provided that 'the six stages of Safe Gas Extraction' are adhered to, strict safety measure are applied and good practices are continued in order to avoid any negative impacts on the environment. Further information on the report can be found on the 'Environmental Impact Assessment' page. Natural gas and oil have been continuously produced in this area since 1943. During this time more than 160 wells have been drilled. Further gas production from new wells will constitute only a fraction of the production that has already taken place. The operations carried out in 2011/2012 and those planned for the future are a continuation of operations that have taken place here for over 70 years. To date, no adverse impacts on the environment have been observed or reported. All our operations comply with existing mining and environmental regulations and are also subjected to continual, strict inspections carried out by mining and environmental inspectors. Complying with national and EU regulations and employing safe, industry-standard working practices minimises all risks associated with the environment.
What difference will this project make to the local and national economies?
An increase in natural gas production in this area could contribute not only to the development of the local economy but also to Slovenia's energy independence. This would be an opportunity for the energy industry in Pomurje to regain its momentum, which, in turn, could have a positive impact on businesses throughout the region. It is estimated that initial gas production from the Pg-10 and Pg-11A wells would amount to 50 to 80 million m3 annually, meeting around 10% of the country's needs. This would reduce Slovenia's reliance on imports, helping the balance of payments and economic growth. It would also reduce the risks associated with the country's dependence on gas imports, related to prices and the security of supply.
What is the life cycle of a well? How often do you need to drill new wells and where would these be located?
The average life cycle of a well in the Petišovci gas field is 20-50 years, depending on the reservoir and the production regime. The Pg-1 well (the first deep well), for example, was drilled in 1960 and is still operating. It isn't always necessary to drill a new well to increase production; where possible, an existing well is deepened to reach further gas bearing layers. New wells can only be drilled in the Petišovci concession area if they comply with environmental and mining legislation. At the end of production, a well is 'plugged and abandoned'. This is carried out in accordance with the relevant regulations of the Mining Act and standard oil and gas industry procedures which ensure safety and the protection of the environment, in particular the surrounding aquifers. See Stage 6 on the Safe Gas Extraction page.
Open every Wednesday from 15:00 to 17:00 at the premises of the company Petrol Geoterm.