China and Australia are among the most
important emerging markets for shale and Coal Bed Methane (CBM) development in
the world. China possesses an estimated 643 billion barrels (billion bbl) of
risked, prospective shale oil and 4,746 trillion cubic feet (tcf) of risked
shale gas in-place, of which around 32.2 billion bbl and 1,115 tcf are
estimated to be technically recoverable. China’s shale resources are primarily
located in the Sichuan, Junggar, Tarim and Songliao basins. The country also
possesses around 1,300 tcf of CBM resources, which are primarily located in
north, northeast, northwest, and south China.
Australia’s shale resources are
primarily located in six major assessed basins – Cooper Basin, Maryborough
Basin, Perth Basin, Canning Basin, Beetaloo Basin and Georgina Basin. The six
basins contain 403 billion bbl of risked shale oil in-place, of which risked,
technically recoverable oil accounts for 17.5 billion bbl. The six basins also
contain 2,046 tcf of risked shale gas in-place, of which risked, technically
recoverable gas is 437 tcf (EIA, 2013). Other major emerging markets for shale
development are Poland and Argentina. Poland possesses an estimated 1.8 billion
bbl of shale oil and 146 tcf of shale gas resources, while Argentina’s
estimated technically recoverable shale resources amount to 27 billion bbl oil
and 802 tcf of gas.
In China, the commercial production of
shale gas has already started and is expected to increase at a considerable
pace in future. Until December 2013, China’s cumulative commercial shale gas
production amounted to around 5.1 billion cubic feet (bcf). China Petrochemical
Corporation (Sinopec) and PetroChina account for almost all of the shale gas
production in the country. Sinopec achieved a total production of around 2.6
bcf, equivalent to a daily production rate of 5.3 million cubic feet per day
(mmcfd), up until December 2013 from its project in Chongqing. The company
plans to achieve an annual shale gas production capacity of 178.7 bcf by 2015
through its Fuling project in Chongqing municipality in southwest China. The
capacity at the Fuling site is also expected to enable China to achieve or
exceed its national target of 232.3 bcf of shale gas production by 2015.
Australia is also witnessing the
substantial development of CBM and shale gas resources. The Cooper Basin has
emerged as particularly well-suited for shale development due to the presence
of substantial gas processing capacity, gas-pipeline infrastructure, and the
presence of service providers for fracking and well drilling in the nearby
area. Additionally, Coal Seam Gas (CSG) projects are already in the production stages
in the Bowen and Surat basins.
Argentina has a suitable geology for the
extraction of shale oil and gas, especially in the Neuquén Basin. The country
is currently witnessing considerable progress in terms of investment in its
shale resources. Some of the major international companies to have announced
plans to invest in shale projects in Argentina include Dow, Chevron, Royal
Dutch Shell (Shell), and Wintershall.
Poland has witnessed many setbacks to
its shale development plans, due primarily to the exit of major companies such
as Eni, ExxonMobil, Marathon Oil and Talisman Energy, all of whom cited
disappointing drilling results. However, other companies operating in the
country such as Chevron are continuing with their exploration plans, and many have
recently announced promising drilling results. For example, in February 2014
BNK Petroleum successfully completed the drilling, casing and cementing of its
Gapowo B-1 horizontal well in Poland. The company reported excellent gas
readings throughout the lateral, which confirmed the high prospects of the
Lower Silurian and Ordovician shales for shale gas. Similarly, Lane Energy
started test production at the Lebien LE-2H horizontal well in Lebork city in
Northern Poland in August 2013. The well was reported to be producing eight
thousand cubic meters (mcm) (or around 283 thousand cubic feet (mcf)) of shale
gas per day, which was considered an unprecedented output in Europe at that
time.
Development
of Oil Sands in Canada and Extra-Heavy Oil in Venezuela Continues
Extra-heavy oil deposits in Venezuela
and oil sands in Canada currently represent the two largest known accumulations
of unconventional oil deposits in the world, representing 220.0 billion bbl and
167.8 billion bbl of proven (1P) reserves respectively in 2012, equivalent to
13.2% and 10.1% of total global 1P oil reserves (BP, 2013).
The Canadian oil sands deposits are
primarily located in the province of Alberta and the development of these
deposits is being carried out primarily in the Athabasca area. Commercial
production from oil sands started in 1968 and reached around 655.9 million
barrels of oil (mmbbl) for 2012. Key factors driving oil sands output in Canada
have been the favorable business and political climate in the country, the growth
of global oil demand, and technological advancements. However, the industry is
also facing a number of challenges, such as relentless opposition from
environmental groups, high water use, and a shortage of skilled workers.
Venezuela’s extra-heavy oil deposits are
located in the Orinoco Oil Belt (OOB) area, which is divided into four blocks:
Boyaca, Junin, Ayacucho and Carabobo. These blocks are further divided into 27
smaller blocks.
Exploration and development activities
in the OOB started in 1920 and continue today, although the pace of development
activities in the area has been relatively slow due to issues such as a lack of
technology and capital, and the relatively unattractive fiscal regime and
business environment in the country. The development of these heavy-oil
deposits is a technological and capital-intensive process when compared with
the process of developing conventional oil deposits. The renationalization of
the Venezuelan oil industry in 2007 led to the exit of some leading oil and gas
companies from the OOB projects, such as ExxonMobil, which has considerably
affected development in the region.
