International shale gas optimism may be unfounded, CEOs say

5-Feb-2010

Oil and gas firms' shale gas investments outside the U.S. may be overly optimistic, two energy company CEOs said this week.

The chief executives of integrated oil and gas firm Anadarko and energy producer Chesapeake Energy Co. said in separate statements that international shale plays may not be as productive as American investments.

Both Chesapeake CEO Aubrey McClendon, speaking at a Colorado energy summit, and Anadarko CEO Bob Daniels, speaking on an earnings call, suggested that many foreign nations have inadequate infrastructure and insufficient gas demand to make major shale investments viable.

"The real difficulty right now is the fiscal terms and the cost structure in these other, more remote locations," Reuters quoted Daniels as saying. "I think [major companies investing in non-U.S. shale] will have a hard time over there at the end of the day," McClendon said.

"I don't see the world being swamped by shale gas in the next 10 years," McClendon added.

The two CEOs were tacitly criticizing ExxonMobil and Conoco. Both companies are making big bets on shale formations in Poland and Germany, Reuters reports.

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