Swedish election may impact Shell’s hunt for Shale Gas

Royal Dutch Shell said on Friday it was drilling the second of three wells looking for shale gas in Sweden, where the centre-left opposition says it will stop Shell's gas hunt if it wins elections on September 19.

Shell has been looking for shale gas in the southern region of Skaane and has already completed work on the first of three exploration wells.

'We are drilling the second well now,' said Shell spokesman Rainer Winzenried. 'Work on the third well will start later in the year, in the summer.'

Shell has said the area was promising and that there could be enough gas to cover Sweden's gas needs for at least 10 years.

But analysis of the wells was needed to confirm the potential, it said.

The opposition Social Democrats, together with their allies the Greens and the Left Party, were given 49.3 percent of votes, versus the four-party ruling coalition's 46.2 percent, in a SIFO poll published by the national daily Svenska Dagbladet on Sunday.

'We have already made clear that a red-green government will not engage in large-scale fossil fuel extraction in Sweden,' wrote the spokesmen for the three opposition parties in a column in the regional daily Sydsvenskan in April.

This position also includes Shell's planned production of natural gas in southern Sweden.'

Shell declined to comment on the position taken by the three parties.

Shale is revolutionising the gas market, contributing to the drop in gas prices, as the prospect of supplies increases.

In the United States, rising shale gas production has raised hopes that it will soon be able to cover all its gas needs domestically.

In Europe, most of the oil majors are hunting for the unconventional fuel, including Exxon Mobil in Germany, while ConocoPhillips and Chevron were looking in Poland.

Shell is also looking for shale gas in Ukraine. It declined comment on the progress of its work there.

Sweden -- which gets most of its electricity from nuclear generators and hydropower -- consumed about a billion cubic metres of natural gas in 2008, according to data from the Swedish Energy Agency.

Source: Reuters