Bulgaria has just recently joined Brazil and Nigeria as countries in which oil giant Chevron are experiencing problems. I say this following the announcement that the US oil company has been prohibited from developing shale gas reserves via the process of hydraulic fracturing. They were initially granted a permit to explore the country’s fracking potential back in June, but after weeks of public protests and rallies over environmental and public health fears, the Bulgarian government has now rescinded its decision. Energy Minister Traicho Traikov said that, “Chevron can still have the right to test for oil and gas, but without using the controversial technology of hydraulic fracturing.” They will continue to drill for oil and gas in north-eastern Bulgaria.
After initial exploration and analysis Bulgaria’s potential reserves of shale gas was estimated at 1 trillion cubic metres, and could have almost completely removed their total reliance on gas imports from Russia’s Gazprom. Due to this heavy reliance on Gazprom they have long looked for ways in which to diversify their energy sources. With Chevrons proposal to develop a five year, €50 million ($72 million) project along with €4 million ($5.8 million) investments in environmental protection, the long sought after liberation from Russia seemed to be within reach; but the public pressure was too great.
Alongside Chevron many other oil majors have been eyeing Eastern Europe for some time in order to tap into the large shale gas reserves. In addition to Bulgaria, Chevron is exploring shale resources in Poland and Ukraine. Royal Dutch Shell is also tapping shale resources in Ukraine, whilst Exxon Mobil has a presence in Poland. Fracking has faced a lot of scrutiny over the past few months and has been blamed for frequent earthquakes and pollution of ground water sources. In fact, although it has revolutionised the US natural gas industry, many states are now banning the process. France has also banned fracking, as have the UK. I imagine that the oil majors are doing all they can to ensure that the other Eastern European countries do not follow these examples and decide that the risks are too great to allow fracking to continue.
Today the Bulgarian government is scheduled to vote a proposal on a total ban on hydraulic fracturing in the country and its Black Sea territorial waters. Be sure that oil majors around the world will be watching closely.
By. James Burgess of Oilprice.com
James Burgess studied Business Management at the University of Nottingham. He has worked in property development, chartered surveying, marketing, law, and accounts. He has also…