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MARKET OVERVIEW

1.1 Definition and Introduction

Shale gas belongs to the natural gas family. It is extracted from shale rocks beneath earth through fracking and horizontal drilling. Industryglobalnews24 estimates that around 71% of extraction is made through horizontal drilling and 29% through hydraulic fracturing (also known as fracking). Shale gas reserves can be found everywhere in the world. 

The global shale gas market is growing at rapid pace as energy demand increases. For this reason, alongside technological innovation, the outlook for shale gas is positive. Nevertheless, the commodity remains criticised for its' negative externalities including water waste and ecosystem interference. 

France's relationship to shale gas is complex; in 2017, it banned any new oil and gas exploration licences with immediate effect, and all oil and gas extractions. Critics claim that this move was purely symbolic however, since France’s oil and gas production represents just 1 percent of national consumption. [AP] Moreover, this implies that France relies 100% on imports. Indeed, since 2018 France has started importing shale gas from the US in particular. 

The shale gas market has been hit hard by COVID-19. McKinsey states that the pandemic has lowered gas demand by 5 to 10 percent.

1.2 The global market is growing

Source: ****
In ****, the global shale gas market for all end users was worth $**.* billion. This figure is expected to grow at a CAGR of *.*% until **** to reach $***.* billion. 
An increase in the global demand for energy together with shale gas' competitive price are key factors to the growth of the market. ...

1.3 The French Market for Shale Gas

In section *.* we mentioned the fact that France became the first country to end fossil fuel exploitation (***) until ****. Nevertheless, France holds the second largest shale gas reserve in Europe, where only Poland sits on more of the resource. [***]
To substitute the restrictions on shale gas extraction, France is highly dependant on ...

DEMAND ANALYSIS

2.1 Profile Analysis: The French Consumer

Public opinion

Source: ****
The French population's view on shale gas is negative in general, and thus in line with regulation around the limitations on extraction. In **** **% of respondents in a survey were negative to this means of obtaining energy. 
One of the main reasons for this sentiment is the French people's ...

2.2 Consumption in France

Source: ****
Energy consumption in France derives primarily from nuclear energy, which has increased from **.*% of usage in **** to **.*% in ****. From the graph above, we also see that the usage of gas has increased slightly, from **.*% to **.*% in ****.
In ****, ***TWh were consumed in total. This represents a decrease of *% YoY compared to ...

2.3 COVID-19's impact on the industry

The Wall Street Journal estimates that investments in the US shale industry will halve in **** due to COVID-**. This will have immediate impact on producers and consequently on prices in an industry which already suffers from pricing pressure. In other words, lower margins imply smaller room for innovation, which means that ...

MARKET STRUCTURE

3.1 Market structure

3.2 Production

Shale gas production in France is * since the country has banned extraction since ****. In other words, France depends ***% on natural gas imports. Nevertheless, this section aims to demonstrate the production process in general, and also highlight production of energy in France in general.

Source: ****
The extraction of shale gas is done ...

3.3 Distribution

The main players of energy (***). The strong presence of American firms is related to their massive supply of shale gas. [***]
The supply of gas is something which is entirely controlled by stakeholders which excludes the end customer. In other words, installation and maintenance is completely outsourced for a fee.

ANALYSIS OF THE OFFER

4.1 Product Analysis

Shale gas is an unconventional natural gas found under earth's surface. It is estimated to make up **% of the earth's surface rocks. [***]
Shale gas can be transformed into liquid natural gas (***), however this means of transporting shale gas is still uncommon.
Shale gas is a topic which causes division in different ...

4.2 Price Analysis

Source: ****
The graph above depicts the price projection from **** to ****. From this graph we see that in **** the price for natural gas was $*.**/MMBtu (***), however if we consider the amount of time this graph depicts, the price remains relatively stable through this period of time. For this reason, i.e. the ...

4.3 Revenue and employment

Source: ****
The table above depicts the revenue and employment contribution which shale gas has hade in the United States between **** and ****. We can see that the chemistry sector has benefitted the most from imports of shale gas, both in terms of revenue and employment. From this table, we see that shale ...

4.4 Cost analysis

UNCTAD estimates that in **** the average production cost of unconventional gas (***), and **% is operating expenses. 

Source: ****
The chart above depicts the estimated distribution of costs of shale gas if France was to produce it. In other words, it is based on US data but could be applied to France as a ...

REGULATION

5.1 Regulation

Since France does not produce shale gas, they are not affected by regulation. However, since France indeed imports and distributes shale gas it is necessary to understand which legislative frameworks they potentially fall under.
In terms of international regulation there are no specific conventions targeted at fracking. 
Concerning shale gas in ...

POSITIONING OF THE PLAYERS

6.1 Segmentation

  • Total
  • Engie
  • Exxonmobil
  • Chevron
  • Halliburton

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in 40 pages
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Analysts

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Analysts

chargé d'études économiques, Xerfi

Hugo Schott

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Associate Consultant

Mathieu Luinaud

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PhD Industrial transformations

Robin Charbonnier

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Analyst

Pierre Doussau

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President Ross Alumni Club France

Arnaud Walter

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Analyste de marché chez Businesscoot

Amaury de Balincourt

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Consultant

Pierrick Cudonnec

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Project Finance Analyst, Consulting

Maelle Vitry

Etudiante en Double-Diplôme Ingénieur-Manager Centrale

Héloise Fruchard

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EDHEC

Imane Essadiq

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Auditeur

Vincent Defrenet

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Eva-Garance Tison

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Market Research Analyst

Michela Grimaldi

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Market Research Analyst @Businesscoot

Azelie Prigent

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Market Research Analyst @Businesscoot

Cantiane Gueguen

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Consultant

Jules Decour

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Alexia Vacheron

Alexia Vacheron

Emil Ohlsson

Emil Ohlsson

Anna Oeser

Anna Oeser

Gabriel Salvitti

Gabriel Salvitti