By Andrew Callus and Terry Wade
LONDON/HOUSTON, Sept 17 Commercially recoverable
reserves of tight oil in the rest of the world could be double
or more those of North America and the geology of the 23 best
opportunities is better in some cases, according to a new study.
But the study by analysis firm IHS warned development in
newer regions will likely to be slower than in the United States
as many countries could run into constraints including
government policy and regulation, lack of access to specialised
kit and skilled labor, and access to land.
Tight or unconventional oil requires the same hydraulic
fracturing and horizontal drilling techniques as shale gas.
"The global potential is really quite large and the
challenges don't just involve technology but legal frameworks
and above-ground issues too," Pete Stark, a co-author of the
study, told Reuters.
The 23 highest-ranking tight oil areas 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.
Costs for unconventional wells in tight deposits can be
three or four times higher than for conventional wells.
Like shale gas, tight oil it has become a boom U.S.
industry, transforming the economy through cheaper energy and
reduced reliance on imports, leading other countries to look at
developing similar reserves.
The study found that more than half the global technically
recoverable reserves outside North America were concentrated in
just 23 of 148 potential development areas it analysed. It put
the total at 300 billion barrels, with 175 billion in the top 23
areas - known as "plays" in the oil and gas industry.
Commercially recoverable resources in North America have
been estimated at 43 billion barrels.
The study maps the potential for "tight" or unconventional
oil without the benefit of well data and so estimated only what
are known as "technically recoverable" reserves outside North
America by looking at their geological characteristics.
"The final measure of technical or commercially recoverable
resources cannot be truly known until the actual well data is
available," Jan Roelofsen, IHS research director and adviser for
unconventionals, said in a statement.
"The potential of just the highest-ranking plays is likely
double the size of North America's resources, and that is a
Output from fracked wells are often characterized by rapid
rates of decline, then steady production for about 20 years,
according to IHS assumptions.
MAJOR PLAYS, COSTS
"The range of geological characteristics and risks of the 23
highest-ranking global tight oil plays compare favorably, or
even better in some cases, than those of leading North American
plays," said Steve Trammel, also an IHS research director and
adviser and the project leader for the study.
The IHS study puts the cost of the average well outside
North America at $8 million compared with $5.6 million inside
North America, ranging from $6.5 million in Australia to more
than $13 million in parts of the Arabian Peninsula, said Stark.
"There is no single magic cost because the plays differ
dramatically," Stark, an IHS senior research director, said. One
big cost factor is well depth and "some plays are in deserts so
water is a major issue."
He said the study assumed basic levels of infrastructure
development and field services were in place for the oil sector
in emerging markets.
"Currently, costs for wildcatters are much higher," he said,
referring to people who are among the first to drill on untapped