Canada’s Vermilion targets Europe for gas expansions amid better pricing
By JEREMY vAN LOON and DIVYA BALJI
Bloomberg
Vermilion Energy is expanding in Germany to tap further into Europe’s higher prices for natural gas as it weathers the slump in North America.
The Canadian producer is selling gas at “triple the price” in Europe, president Anthony Marino said in an interview on Tuesday. The Calgary-based company entered a five-year pact with Mobil Erdgas-Erdoel and BEB Erdgas und Erdoel to explore and develop wells near Hannover in the northern part of the country.
“The productivity is generally better in Europe and there are bigger prospects and higher production rates than you would typically find in North American conventional development,” Marino said. “We also have the better pricing and therefore quite a bit stronger return in Europe.”
Vermilion, the largest oil producer in France, is also active in the Netherlands and already had operations in Germany. The company expects similar production levels from the new German land to its existing operations in other parts of Europe, Marino said.
North American gas prices have plummeted in past years after the development of fracking technology led output from shale plays to surge. Futures have slumped by almost half in New York since February 2014, and they’re trading at less than a fifth their peak in December 2005.
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