Global shale oil dwarfs US reserves

Analytics firm IHS has identified the 23 highest-potential shale oil plays throughout the world and found that the potential technically recoverable resources of just those plays is likely to be 175 billion barrels, out of almost 300 billion for all 148 play areas analysed for the study, Going Global: Predicting the Next Tight Oil Revolution.

The study says that while it is too early to assess the proportion of this that could be commercially recovered, the potential is significant compared to the commercially recoverable resources of tight oil (43 billion barrels) estimated in North America by previous IHS studies.

The 23 highest-ranking tight oil plays identified by the study include well-documented areas such as the Vaca Muerta Formation in Argentina, the Silurian “hot” shales in North Africa and the Bazhenov Shale in West Siberia. However, the list also includes lesser-known geological plays in Europe, the Middle East, Asia and Australia.

Launching global tight oil development outside of North America will probably be much slower overall

Pete Stark, IHS senior research director

The growth of tight oil production has driven the recent surge in North American production. The production process applies the same hydraulic fracturing and horizontal drilling techniques that have led to a boom in the production of shale gas.

“This study makes clear that the potential for global tight oil is there and that it is very, very large,” said Jan Roelofsen, IHS research director and advisor for unconventionals.

“The final measure of technical or commercially recoverable resources cannot be truly known until the actual well data is available. You simply cannot quantify it for sure until you begin to drill. But this study’s unique, data-based assessment shows that the potential of just the highest-ranking plays is likely double the size of North America’s resources, and that is a conservative estimate.”

Above-ground issues, including the need for a strong service sector to deliver modern rigs, specialised well completion crews and modern hydraulic fracturing equipment, as well as factors ranging from government policy, land access constraints, regulatory frameworks to water management issues will heavily influence the pace of development, the study says.

“Given the range of below and above-ground issues to be managed, launching global tight oil development outside of North America will probably be much slower overall,” said Pete Stark, IHS senior research director and advisor for unconventionals.

“But the potential is certainly there and there will be opportunities for early progress where the right conditions exist.”