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Production at Falcon Oil and Gas licenses depends on deep-well technology

Two natural gas licenses in Hungary owned by Canada's Falcon Oil and Gas could start production as soon as the middle of 2007 depending on how well special deep-well technology, currently only used in the US, can be adapted at the site, György Szabó, the managing director of TXM, Falcon Oil and Gas's Hungarian unit, told MTI on Monday

Szabó said drilling at the license near Makó has reached 6,000 meter and drilling at the license near Pusztaszer has reached 4,500 meter. He added that a daily Ft 50 million had been spent on deep-well technology at the site since December 29, 2005. The exploration of the two licenses is expected to last four years. Szabó said that a pipeline has already been built to connect the wells to another pipeline owned by Hungarian oil and gas company Mol. Industry insiders note that production at depths greater than 5,000 meter using conventional technology is risky both in technical terms as well as in terms of profitability. Sándor Nagy, the head engineer at the mining office which oversees the Makó area, told MTI the license area is estimated to contain reserves of 600 billion cubic meter of natural gas, confirming reports on the internet. Péter Esztó, president of the Hungarian Mining Office, told MTI that the office requires companies to obtain permits from 19 different authorities before starting gas production. The process takes at least five months, he said. (Mti-Eco)