Mitsui & Co., Ltd. announced that it has entered into a definitive agreement with subsidiaries of the U.S. oil and gas development company, Marathon Oil Corporation, to acquire a 9% working interest in 10 of Marathon’s Paleozoic shale gas exploration concessions in the Republic of Poland. Another partner is a subsidiary of Nexen Inc., which owns a 40% working interest of the concessions.
The closing of the transaction is subject to the statutory approval by the relevant Polish governmental authorities and Nexen. Mitsui is the first Japanese company to enter into a European shale gas project.
The 10 concessions, encompassing 2.1 million acre are located from north-east to south-east onshore Poland. Seismic and other geological analysis, as well as drilling of exploration wells to evaluate technical potential of the concessions will be carried out over the next 5 years.
The global demand for natural gas is expected to continue to increase in the future as the need for cleaner energy continues to rise. Although the development of shale gas had been considered uneconomical in the past, due to the recent technological advances and innovation, low-cost development and production have become feasible in recent years. Poland is considered to be one of the most attractive shale gas potential areas in Europe, where the development of shale gas by the major oil and gas companies is expected to accelerate.
Mitsui is conducting shale gas development and production activities in the Marcellus Shale, Pennsylvania. With experience and knowledge acquired from this project, Mitsui intends to expand presence in the European gas market, which follows the US gas market. Additionally, Mitsui aims to expand shale gas business into the U.S., Europe, and other areas around the world, leveraging global network and the knowledge and know-how regarding shale gas obtained through the Marcellus Shale gas project and this project.
Mitsui has positioned its energy and mineral resources business as a strategically significant business area and will continue to acquire attractive oil and gas assets in order to establish a most robust and well-balanced business portfolio.
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Source: Mitsui, June 9, 2011;