FRENCH, U.S. FIRMS TO TEAM UP ON SHALE
The French energy giant Total is staking a claim in a U.S. oil shale project, gaining an interest in a federal lease in northwest Colorado.
The company issued a news release Wednesday saying it will acquire a 50 percent stake in IDT Corp.’s American Shale Oil LLC subsidiary.
American Shale Oil, or AMSO, is one of three companies holding 10-year oil shale research, development and demonstration leases granted by the Bureau of Land Management in Rio Blanco County. Companies holding the 160-acre leases have the right to convert them to leases covering about eight square miles for commercial production upon meeting certain conditions.
Under the agreement, expected to close during the first quarter of this year, Total and IDT will jointly develop a research and development program making use of a new in-situ technology on the lease site. In-situ approaches involve producing oil while leaving the shale in place underground.
Total says it will provide a majority of funding during the research, development and demonstration phase, and technical assistance throughout the life of the project. AMSO will manage operations during the first phase, with Total taking over during the commercial phase.
Total says the AMSO lease, if expanded to the commercial level, gives rights to billions of barrels of recoverable oil. It says its involvement shows its commitment to developing nonconventional oil resources.
“Given the magnitude of oil shale resources, we believe that this project has an important long-term potential for global energy markets,” Yves-Louis Darricarrére, Total’s exploration and production president, said in the news release.
AMSO’s plan involves using horizontal wells to heat rock formations, and drilling production wells to collect hot oil vapors.
“AMSO has a strongly skilled technical team, as well as interesting original ideas,” Darricarrére said.
Howard Jonas, IDT’s chairman and AMSO’s chairman and chief executive officer, said Total will bring “unparalleled expertise” to the project.
“We particularly value their dedication to finding an approach to oil shale production that respects the unique environment of western Colorado,” he said in a statement.
The federal government originally issued the AMSO lease to E.G.L. Resources, which assigned it to E.G.L. Oil Shale LLC. IDT acquired a 75 percent interest in E.G.L. Oil Shale last January and later renamed the project as AMSO.