Japan retrieves first shale oil in test drills

TOKYO, Oct 3 (Reuters) - Japan Petroleum Exploration (Japex)

said it has retrieved the country's first oil from shale layers deep below the earth's surface, a potentially important development for a nation that imports most of its energy requirements.

The country's oil and gas needs have spiked after most of Japan's nuclear power stations were shut down due to the Fukushima nuclear disaster, forcing Tokyo to spend millions of dollars more on fuel for electricity generation.

Tests to retrieve oil trapped in shale layers below the Ayukawa oil and gas field in Akita in northern Japan were successful on Wednesday, a Japex official said.

Shale oil, also known as "tight oil" because it is sandwiched between hard layers of shale rock, is one the world's fastest-growing sources of oil and mass production has taken off in the United States and Canada.

Japex estimates several million barrels of shale oil are contained in the Ayukawa oil and gas field. The company is hoping that about 100 million barrels of shale oil, equivalent to about 8 percent of Japan's annual domestic oil demand, lie under Akita prefecture.

Japex is examining whether commercial extraction is feasible, the official said.

(Reporting by Osamu Tsukimori; Editing by Aaron Sheldrick and Ed Davies)

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Keywords: SHALE JAPAN/