UPDATE 3-Rise in shale oil boosts global crude supply estimate -U.S. EIA

Mon Jun 10, 2013 4:29pm EDT

Related Topics

* Shale reserves boost global reserves by 11 percent
    * Russia tops list of oil shale holders
    * Algeria shale gas resource estimate jumps threefold


    By Edward McAllister and Timothy Gardner
    NEW YORK/WASHINGTON June 10 (Reuters) - Estimated global
reserves of oil in shale rock deposits will boost total world
crude resources by 11 percent, a U.S. government report said on
Monday, offering a preliminary glimpse of the hydrocarbons that
remain untapped across the world.
    In the first study of its kind by the U.S. government, the
Energy Information Administration estimated technically
recoverable shale oil reserves in 41 countries at 345 billion
barrels. 
    Previous EIA reports only included U.S. shale oil resources,
which in 2011 were estimated at 32 billion barrels. It now
estimates U.S. shale oil reserves at 58 billion barrels. 
    Meanwhile, global shale gas reserves have risen to 7,299
trillion cubic feet, up from 6,622 tcf estimated in 2011, said
the EIA, the independent statistics arm of the Department of
Energy.
    Technically recoverable reserves are an estimation of the
amount of oil or gas that can be extracted with today's
technology.
    Russia topped the list of oil reserves, with 75 billion
barrels, ahead of the United States with 48 billion, China with
32 billion and Argentina with 27 billion barrels, according to
an assessment prepared for the EIA by Advanced Resources
International (ARI). 
    ARI's estimate of U.S. technically recoverable shale oil
resources was 48 billion barrels, 10 billion less than the EIA's
estimate.     
    The United States, with 1,161 tcf, held the highest natural
gas reserves, according to ARI, ahead of China with 1,115,
Argentina with 802 tcf and Algeria with 707 tcf. Algeria's
estimate has more than tripled from the 231 tcf estimated in
2011. 
    Oil and natural gas production has rocketed in the United
States in recent years due to the emergence of horizontal
drilling and hydraulic fracturing, or fracking, that have
unlocked decades of supply from shale deposits dotted across the
country. 
    But while the EIA report offers a comprehensive glimpse of
global shale potential, technically recoverable reserves are not
a guarantee of supply and it is unclear if deposits outside the
United States, with varying geology, can be developed
economically. Even inside the United States some areas have
proved to be more difficult and expensive to develop than
others, halting development. 
    "The reserves are one thing, but the ability to scale up the
production for those reserves is another thing, which is not as
straightforward in many parts of the world as it has proved to
be in the U.S.," said Jan Stuart, head of energy research at
Credit Suisse in New York.
    A clear example is Poland, ranked twelfth in the list of
shale gas reserves, which has attracted a lot of interest in its
shale potential over the past few years. Early drilling
suggested extraction would be difficult and companies including
Exxon Mobil, Talisman Energy and Marathon
 have since quit shale drilling there. 
    Still, David Pumphrey, a senior fellow at the Center for
Strategic and International Studies, said the report could help
push countries like Argentina and Poland to develop their
reserves. "The fact that it is there in the ground keeps
reinforcing this is a big story," he said.
    Pumphrey expected further evolution in drilling technologies
could make more and more of the resources economically favorable
to produce in the future.
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