London (Platts)--25Jan2011/804 am EST/1304 GMT

US major ExxonMobil is drilling for shale gas in Germany, a company spokesman told Platts by email late Monday.

"We are currently drilling exploration wells in Germany to study the unconventional gas potential in Lower Saxony and North Rhine Westphalia," upstream spokesman Patrick McGinn said.

He did not, however, say how much the company was spending on the drilling.

"We do not provide details on the financial investments of our exploration programs," the spokesman said.

An idea of the scale of the investment was, however, provided by an article in Germany's Handelsblatt newspaper Monday. ExxonMobil told the paper that exploration costs could be in the hundreds of millions of euros.

The Handelsblatt article also referred to possible gas potential of 2,100 billion cubic meters in North Rhine Westphalia, although it did not give details of how likely this was, or how much might be recoverable.

One expert told Platts that reserves estimates would depend on the geological assumptions made.

If all that volume could be brought to market, it would be enough to supply Germany's current level of gas consumption for about 26 years.

Germany currently imports most of its gas, from the Netherlands, Norway and Russia. BERLIN INSTITUTE PROGRESSING SHALE RESEARCH

Meanwhile, the GFZ German Research Centre for Geosciences, based in Potsdam near Berlin, told Platts its GASH research project into European shale reserves was making good progress.

"We have made great strides building a European Black Shale Database, and have now high-graded the countries so we can better focus our financial resources," said Brian Horsfield, one of the project leaders.

The researchers have also drilled a shallow borehole on the Danish island of Bornholm to collect geological samples for investigation.

The center's shale gas research project is aimed at discovering why gas is sometimes present at high concentrations and why sometimes at low concentrations within the same shale body and why production efficiency varies dramatically.

The center is looking at geological samples from various shales, aiming to reconstruct how the shale was formed and how it changed over millions of years.

It is comparing Alum shale from Sweden and Denmark, Posidonia shale from Germany, Carboniferous shale from Germany and the Barnett shale from the US.

"We have gathered important data from regional down to nanometer scale to demonstrate how gas is generated and is either retained or migrates out of the rock," Horsfield said.

"We are pleased to see that the samples we have are representative of gas shales worldwide, in other words of petroleum source rocks in conventional gas systems," he added. "If this were not the case we would be very concerned about representativity."

The GASH project, which started in 2009, is the first European interdisciplinary shale gas research initiative, and is to last three years in its initial phase.

Sponsors include: Statoil, ExxonMobil, GDF Suez, Wintershall, Vermilion, Marathon Oil, Total, Repsol, Schlumberger and Bayerngas.

--Alex Froley, alex_froley@platts.com

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