Shell Mulls UK Shale Play

Oil major Royal Dutch Shell is considering a move into the UK shale gas sector, according to reports by The Daily Telegraph. While this is encouraging, we do not anticipate that Shell will move into the segment until more extensive exploration and appraisal work is completed. There are also likely to be a number of challenges to commercial shale gas production in the UK, which Shell will be studying carefully. These challenges would stem from issues including: population densities, mineral rights and the under-developed onshore oil and gas services sector. If Shell does make a move, one possible target could be IGas , the local coalbed methane specialist exploring in Lancashire's Ince Marsh, which has already indicated that it would welcome a farm-in partner.

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