The Board of Directors took notice of the information on the shale gas industry outlook.

The Gazprom Management Committee was tasked to keep monitoring the shale gas industry development in various regions of the world.

Background:

Non-conventional gas, including shale gas, has been increasingly attracting public attention worldwide but is no news for the gas industry. A surge of interest is primarily explained by growing shale gas production in the USA that triggered the study on similar opportunities in other regions of the world, namely, in Europe and Asia.

However, shale gas production projects feature a number of technological and commercial peculiarities. These are a large scope of production drilling, a sharp drop in production volumes in the first years, a constant need to move to new development areas and substantial environmental risks. Moreover, the prime cost of shale gas production is rather high. For instance, it is several times higher than the prime cost of conventional gas production in Russia. These factors predetermine the role of shale gas as a local resource offsetting the lack or absence of conventional gas in regional markets.

Meanwhile, Gazprom possesses its own non-conventional gas production technologies and applies them for coalbed methane extraction in Kuzbass.