By Eduard Gismatullin - Oct 18, 2012 7:01 PM ET
Royal Dutch Shell Plc (RDSA), Europe’s largest oil company, is expanding exploration in the south of the continent, where nations plan to reduce fuel imports.
The company has obtained projects in Albania, Turkey and Ukraine in the last 12 months. In July, Shell and Total SA (FP) agreed to invest about $1.9 billion to develop the Tempa Rossa field in the Basilicata region in southern Italy. Shell also won two exploration licenses in the Gulf of Taranto off the coast of Italy in 2010.
“Italy is an emerging, interesting producer for us,” Andy Brown, Shell’s director of international production, said in an interview in London. “In terms of our prospective resources we’ve restocked our funnel quite successfully over the last few years.”
Turkey, which imports almost all of its energy, needs to find domestic oil and gas reserves to ensure security of supply and replace imports, which could cost the nation about $50 billion this year. Italy, which imports 84 percent of its energy, plans to double the share of its domestic production to 14 percent of energy demand in 2020, according to a strategic plan presented by the government this month. Ukraine wants to ease dependence on supplies from Russia.
“We are particularly busy in southern Europe,” Brown said. “We always knew there is oil in Albania.”
The Anglo-Dutch company in May paid $50.3 million to Petromanas Energy Inc. (PMI) for a 50 percent stake in Blocks 2 and 3 in Albania, according to the Calgary-based company.
In Turkey, Shell and state-owned Turkiye Petrolleri AO started exploring for shale gas in the Dadas area in the southeast of the country. Shell also started seismic work in the deepwater Mediterranean Sea south off Antalya. In March, it agreed with TransAtlantic Petroleum Ltd. (TNP) to survey the Sivas Basin in north-central Turkey.
“We have a big exploration portfolio now in Turkey,” Brown said. “We are well-placed.”
Shell, based in The Hague, planned to increase investment in exploration by 35 percent to about $5 billion this year, after raising spending 30 percent to $3.6 billion last year, it said in February. It secured interests in frontiers such as Tanzania, French Guiana and southern Africa.
“I see an enormous number of opportunities,” Brown said. “We are looking around the world at the various basins and we will obviously work hard to get access ahead of the competition.”