Undeveloped fields will produce 1 million barrels a day of oil by 2025, Yves-Louis Darricarrere, president of exploration and production for Paris-based Total, said yesterday on the first of five days of CERAWeek, an annual conference in Houston held by IHS Cambridge Energy Research Associates.
New production methods, such as hydraulic fracturing to free natural gas from shale formations, have made previously impenetrable resources accessible, said Daniel Yergin, IHS CERA chairman. The technology is spreading from North America to other nations seeking to increase production.
“We’re hearing about Kurdistan, about the unconventional oil in the U.S., Saudi Arabia is talking about shale gas,” Yergin said in an interview yesterday. “There’s a sense that there’s a bigger menu than people thought in 2008.”
Global oil reserves rose to a record 1.38 trillion barrels in 2010 as technological advances unlocked production from once impenetrable shale formations and deep-water reserves, according to BP Plc. (BP/) In the U.S., the amount of gas produced and sold in 2010 rose to the highest in 37 years, according to the Energy Department.
World energy demand is expected to increase by one-third by 2035, according to the International Energy Agency.
Iraq’s Kurdistan region will export 75,000 barrels of oil a day this year and 1 million barrels a day by 2015, said Ashti Hawrami, the region’s Minister of Natural Resources. Offshore Mexico may hold another 25 billion barrels of oil, said Juan Jose Suarez Coppel, chief executive officer of Petroleos Mexicanos, known as Pemex.
“We’ve seen tremendous technological innovation with shale development, also with deep-water exploration, and they’re chomping at the bit a little to get their hands onto the Arctic offshore,” Charles Dewhurst, head of the global energy practice for BDO USA LLP, an accounting and consulting firm, said in an interview at the conference.
Energy producers from all over the world are looking to the U.S. for lessons on how to exploit shale formations, Bill Sanderson, vice president of IHS Purvin & Gertz, said in a conference presentation.
Saudi Arabian Oil Co. plans to pursue unconventional gas, such as that tapped from shale basins in the U.S., to feed power and chemical plants, Amin Nasser, senior vice president for upstream operations, said at the conference. The company also plans to begin domestic deep-water drilling by year’s end, he said.
International Shale Development
“I thought by having someone from Saudi Aramco on the panel we’d at least have someone who wouldn’t talk about unconventional,” said David Hobbs, chief energy strategist for IHS. “It tells us how things are moving.”
International shale development faces many obstacles including bans on hydraulic fracturing, the drilling technique used to unlock oil and gas from dense rock formations. The method, which involves injecting water, chemicals and sand underground, has been prohibited in France and is under review by the U.S. Environmental Protection Agency for potential water contamination.
Some of the biggest hurdles to increasing fracking operations outside the U.S. are the lack of trained workers and basic infrastructure, Marcus Rowland, CEO for FTS International LLC, told reporters at CERA. The company provides fracking services.
“Most of these plays that are going to produce gas don’t have gas gathering or transportation of the gas into the markets,” Rowland said. “So you start, really, at a very basic level, which is you don’t have anything and you’ve got to start from scratch.”
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