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Kuwait Petroleum Corporation’s overseas upstream arm KUFPEC is shelling out $1.5bn on Canadian shale – the first major move by a Gulf NOC into a shale development.
KUFPEC has agreed to pay Chevron US$1.5bn to take a 30% stake in a new joint venture with the US firm covering the 330,000-acre lease at the Duvernay shale lease in western Canada’s key oil province of Alberta. The bulk of the $1.5bn will be paid up front upon expected deal closure next month with the remainder to be paid against future capital costs.
Duvernay looks set to be one of the next major hits in North American shale development. According to Alberta’s Energy Resources Conservation Board P50 reserves estimates for Duvernay, the play has oil reserves of 61.7bn barrels, NGL reserves of 11.3bn barrels and gas reserves of 443 tcf, suggesting that Duvernay is twice as large as prolific US shale formation, Eagle Ford. In a recently-published report for the Baker Institute entitled Shale Gas and Tight Oil, Al Troner, President of Houston-based Asia Pacific Energy Consulting, suggests that “even if 2P reserves were about a third of these levels, it would be enormous.” (CONTINUED - 1641 WORDS)