On 6 May 2014, Wragge Lawrence Graham & Co partners Kieron Dwyer and David Ponsford joined Gilbert Porter and Brad Richards, partners at US firm Haynes and Boone, to host an international webinar entitled ‘Update on shale gas exploration and development’.
Porter and Richards opened the presentation by outlining the rise of shale production in the US over just six years. They examined the opportunities as well as the risks associated with this relatively novel energy resource — production of which has grown by 150,663 per cent since 2008, transforming the US energy domestic market and, potentially, its export market.
On 5 May, the House of Lords Economic Affairs Committee recommended that fracking should be an ‘urgent national priority’. Corporate partner David Ponsford made the most of this timely opportunity to give an overview of the development of shale exploration in the UK.
Ponsford examined the macro environment in the UK, covering public perception, government rhetoric and current geopolitical factors, as well as growing investment activity in the sector.
He also summarised the evolving legal, regulatory and legislative background to the potential exploitation of the UK’s shale gas and oil reserves. The summary included a recap of the current law in relation to trespass and the government’s plans for reform to be included in the upcoming Queen’s Speech.
Structured finance specialist Kieron Dwyer drew on his team’s substantial experience in emerging markets to examine the implications for Africa.
Dwyer looked at the contrasting effects that shale could have on the economies of Nigeria — a member of the Organisation of the Petroleum Exporting Countries (OPEC) — and the energy-constrained Republic of South Africa.
Noting the potential threat of shale oil production to Nigeria’s oil-dependent economy, he queried whether it was time for OPEC countries to plan ahead and diversify. Finally, Dwyer contemplated the opportunity for shale gas to help serve South Africa’s extensive energy needs, focusing closely on the commercial viability of shale resources in the Karoo.