Could Japan be on its way to its own shale boom? Japan Petroleum Exploration Co. (TYO: 1662), known as Japex, has announced that it managed to extract crude oil from test samples in a gas field in Akita prefecture yesterday.
It’s possible there is almost 5 million barrels of shale oil deposits around the Ayukawa oil and gas field, and roughly 20 times that could be caught in the sedimentary rock throughout the Akita prefecture.
Granted, this isn’t much compared to North America’s trillions of barrels in reserves, but it’d still match around 10 percent of Japan’s yearly crude consumption. Japex has asked U.S. developer Halliburton Co. (NYSE: HAL) to help develop this oil. The company owns three oil and gas fields in the northern prefecture.
Japan’s government has frequently asked that the American government lift its export ban on liquefied natural gas to countries not on a free-trade agreement with the U.S. This new development could ease Japan’s route to joining the Trans-Pacific Partnership, which in turn would certainly help Japan’s efforts to import LNG from the U.S.
In this latest development, workers were able to release crude oil from bedrock with acid, pumping it as deep as 1,800 meters on Monday. Extraction began on Tuesday – all of this just two months after Japex bought a small stake in Texas’s Eagle Ford project.
Of course, there are geological quirks, technical difficulties, and analyses to go through. Nevertheless, this is a good sign of Japan’s increasing initiative to develop homegrown energy. Undoubtedly, the Fukushima disaster has been a powerful wake-up call for the national energy policy.
Back in June, the Japanese government announced the discovery of a fairly large oil field off Niigata prefecture’s Sado Island. The government will provide most of the ¥10 billion ($12 million) that’s needed to further explore that find. Exploration will be undertaken by JX Nippon Oil and Gas Exploration Corp., and the company will later decide how to move forward.