Prior to Rhein Petroleum's oil well in Riedstadt, western Germany, the last operating well in western Hesse state closed in 1994
Riedstadt (Germany) (AFP) - Outside the small town of Riedstadt, near Frankfurt, a bright green derrick pumping oil from deep underground marks a rare rural German site where that is still a profitable business.
As Berlin battles to reach climate neutrality by 2050, minnow Rhein Petroleum sees a niche for its unusually pure crude during the transition phase, although its output is dwarfed by the more than two million barrels a day still consumed by Europe’s top economy.
Manager Carsten Reinhold holds up a flask of the lukewarm, dark liquid the pumps have been heaving up from 1,500 metres (5,000 feet) below ground since last year.
Low in sulphur, such “light and sweet” crude oil resembles the so-called Brent reserves found in the North Sea.
“It would be a shame to burn it all up” to fuel road traffic, Reinhold says, as this type of oil is especially suited to manufacturing industries, feeding into chemicals, pharmaceuticals, textiles and even blades for wind turbines.
A tanker truck passes by twice a week on average to siphon 33,000 litres (8,700 gallons) from the site’s metal storage tanks, some of it from the firm’s other drilling site in Bavaria.
It brings the oil to a refinery 80 kilometres (50 miles) away.
- ‘Like an ultrasound’ -
Rhein Petroleum was founded in 2007 by former Shell executives, and is today controlled by Netherlands-based Tulip Oil.
Where most German oil is pumped in the country’s north, especially out to sea, the company has bet on inland fields to the south.
The last well in the previous wave of extraction in western Hesse state closed in 1994, as oil prices below $20 per barrel and expensive techniques throttled profitability.
Rhein Petroleum's well was possible in part owing to prospecting technology that can identify hydrocarbon reserves deep underground
But with prices now above $60 – having previously peaked above $100 – margins look more promising.
Meanwhile, the oil company says the prospecting technology available for identifying hydrocarbon reserves deep below the earth has improved massively.
“Just like an ultrasound scan of a pregnant woman,” the latest technologies can create a 3D visualisation of the world beneath our feet, Reinhold explains.
Meanwhile drilling itself has become cheaper, as a single well can allow prospectors to explore a radius several hundred metres across, rather than having to drill again if they don’t hit the right spot.
And where once wells were staffed around the clock, these days the high-tech facilities – built by Munich-based Siemens – can be controlled remotely with a smartphone app.
Even environmentalist activists are not a problem, as they are presently focused on Germany’s massive open-cast brown coal mines.
Rhein Petroleum says it is in contact with ecological movements, who approve of the company’s policy not to use the controversial hydraulic fracking technology that has powered the shale gas and oil boom.
- Vital raw material -
Heidelberg-based Rhein Petroleum’s success is an outlier amid a German oil sector in a long-term decline however.
From a peak of around eight million tonnes per year in the late 1960s, crude output fell to just over two million tonnes by 2018.
That was enough to cover around two percent of the requirements of Europe’s largest economy, still heavily industrialised.
“It’s important that we don’t give up oil extraction altogether, it helps reduce our dependence on imports, even if only a little,” says Ralf Schairer, who heads the Miro refinery.
Rhein Petroleum's oil well in Riedstadt, western Germany produces a "light, sweet crude" well suited for manufacturing chemicals, pharmaceuticals and textiles
Energy expert Claudia Kemfert at economic think-tank DIW disagreed, saying oil extraction in Germany “belongs to the past,” as “the energy transition and climate protection (measures) will marginalise hydrocarbons”.
Even now, she pointed out, major German carmakers like Volkswagen are making big bets on electric vehicles, while industries are looking for materials not based on oil.
But chemical behemoth BASF, while itself exploring such technologies, believes “natural gas and oil derivatives will remain an important raw material for the chemical industry over the medium term.”
Rhein Petroleum judges there is money to be made in the transition period, with its sights set on recently-discovered oil reserves in neighbouring Baden-Wuerttemberg state.
Exploration is set to start late next year.