By 2019, tight oil supply outside the United States could reach 650,000 barrels per day, including 390,000 b/d from Canada, 100,000 b/d from Russia, and 90,000 b/d from Argentina, according to a new report from the International Energy Agency dated June 17.
Several countries are trying to replicate the success the US has enjoyed with its shale and tight oil development.
In a June 18 report on international shale, consulting firm Accenture said that Argentina's Neuquen Basin has the greatest potential for development of its unconventional resources, including shale gas and oil, outside North America. The report reviewed basins in Argentina, Australia, China, Mexico, Poland, Russia, Saudi Arabia, South Africa, and the United Kingdom. It examined each of these basins against eight "critical factors" required for the development of unconventional resources and analyzed their investment prospects.
Of these basins, the largest number of test wells drilled to date (about 200) have been drilled in Argentina and China, where the technically recoverable shale gas resources are estimated at 802 trillion cubic feet and 1,115 tcf, respectively. By comparison, the US has an estimated 665 tcf.
Although Argentina is a challenging environment for foreign investment, the Argentine government has begun offering attractive incentives to lure companies to the region.
China's biggest challenge is land access and operability, given its terrain, population density, and water scarcity, says Accenture. Development will depend on the ability of Chinese companies to adapt existing technologies to local geological conditions.
In Australia and Mexico, the level of competition for investment and human resources from conventional oil and gas development will have a substantial effect on the pace of developing unconventional resources.
In the UK, popular opposition to unconventionals will be a key factor affecting the pace of development. Energy minister Michael Fallon took the opportunity on June 24 at the UK Shale Conference to cite the energy security crises in the Ukraine and Iraq as further reason to focus on shale gas and oil exploration in that country.
Photo courtesy of Apache Corp.
In the latest step towards the development of the its shale resources, revisions to the UK's petroleum license model clauses will be implemented to accommodate the practicalities of hydraulic fracturing in connection with the recovery of unconventional resources, according to a government spokesman. This announcement is encouraging to the UK shale industry.
The pace of development in Poland's Baltic Basin will depend largely upon a draft bill currently in the Parliament in Warsaw that addresses many of the operators' concerns regarding the previous regulatory proposals. The draft bill abandons plans to create a new national regulator, proposes a more attractive tax regime, and seeks to streamline licensing procedures. The question is whether or not the early enthusiasm for shale development in Poland will return.
In Saudi Arabia, energy demand is growing rapidly, but the Saudis lack knowledge about shale formations and lack the infrastructure in some frontier locations. Water availability, necessary for hydraulic fracturing, may also be an issue.
On June 26, a town in northern Denmark gave the green light to French energy major Total to drill the first test wells for shale gas. Conventional gas production is falling and last year Denmark consumed more energy than it produced for the first time since 1997, although the country remains a net oil exporter.
Total and state-owned North Sea Fund plan to launch an exploration well later this summer. However, the operator (Total) will initially be permitted only to drill a well to test samples without the use of hydraulic fracturing.
The government issued two licenses in 2010 for Total and North Sea Fund to explore for oil and gas in northeast Denmark, where shale formations are found at depths of around 4,000 meters (about 13,000 feet).
Production of shale gas in Denmark is not expected to begin until 2020 at the earliest.
