UPDATE 2-Total to do test drilling for shale gas in Denmark

Fri Jul 4, 2014 9:13am EDT

* Plans test drilling in Denmark in Dec or Jan

* Separate permit need for hydraulic fracking

* Plans to explore for shale gas in UK, Russia

* Europe remains split on shale gas exploration (Adds detail)

By Nerijus Adomaitis

OSLO, July 4 (Reuters) - Total plans to drill Denmark's first test wells for shale gas in December or January, the French energy firm said on Friday, following its deals to explore for unconventional hydrocarbons in Britain and Russia.

Faced with France's ban on exploring for shale gas at home, Total is emerging as one of the most active oil and gas majors betting on a U.S.-style shale boom in Europe.

Total said it planned to conduct test drilling in Denmark for three months.

"If the results are positive, a test using hydraulic fracturing (fracking) will be carried out in 2015," a spokeswoman for the firm said in an email.

Total holds 80 percent of the licence and Denmark's state-owned North Sea Fund the other 20 percent.

The French firm struck a deal this year to explore for shale gas in Britain, buying two licences in northern England.

It also struck a deal with Russia's No 2 oil producer Lukoil last May to tap "tight" oil reserves in the Bazhenov play in Siberia, one of the world's largest shale oil formations.

Total is also investing in research and development in the search for alternatives to fracking, such as exploration using pyrolysis.

The Frederikshavn municipality in northern Denmark gave Total approval last week to drill conventional wells in shale formations about 4,000 metres (13,120 feet) below the surface.

A separate environmental impact assessment (EIA) study and permits will be needed to use hydraulic fracking, Total said.

EUROPE SPLIT

Europe remains split on shale gas exploration using hydraulic fracking, which blasts chemicals, sand and water deep into the earth to break up shale formations and allow gas to escape.

Shale exploration plans have been met by widespread protests due to fears that it can contaminate underground water. Environmentalists have also protested such plans in Denmark.

France, which is thought to hold some of the biggest shale gas reserves in Europe, has banned hydraulic fracking.

Others, such as Britain and Poland, are pushing hard for the development of shale gas, seen as one way to lessen European dependence on Russian natural gas, as well as to lower energy costs as it has in the United States.

Repeating the U.S. success with shale faces challenges however, given the number of governments and regulators involved across the region.

Total said in April it had decided not to extend its only licence for shale gas exploration in Poland after drilling showed gas reserves were too low for commercial production.

U.S. ExxonMobil, Marathon Oil and Canada's Talisman Energy have also abandoned Poland's shale sector.

In Denmark, shale gas production is seen as an opportunity to keep the country self-sufficient in energy as it depletes conventional gas fields in the North Sea.

Last year, Denmark consumed more energy than it produced for the first time since 1997.

Though the country remains a net oil and gas exporter, output fell by 13 percent and 18 percent respectively in 2013, Danish energy agency data shows.

Denmark is Sweden's sole natural gas supplier and also exports gas to Germany and the Netherlands. (Additional reporting by Michel Rose in Paris)

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