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Shale reservoirs have become an important part of North American oil and gas supply and their development has begun a new era of oil and gas production worldwide. Advances in well drilling and completion technologies supported the rapid development of shale resources which contributed to the almost overwhelming success of U.S. shale in recent years. Globally, Argentina’s Neuquén Basin and China’s Sichuan Basin are the two front-runners to emulate the successes of the United States, with Poland, Algeria, Australia, Colombia, Russia, and Mexico still in earlier phases of exploration and evaluation, while Saudi Arabia also has plans for domestic shale...

What OPEC countries fear most is a follow-up technological revolution that will lead to a second oil boom in the U.S., and that fear is now being realized. A technological revolution spurred the U.S. oil boom that resulted in the greatest increase in domestic oil production in a century, and while that has stuttered in the face of a major oil price slump and an OPEC campaign to maintain a grip on market share, the American response could be another technological revolution that demonstrates that the first one was merely an impressive embryonic experiment. It’s not only about shale now—it’s...

The oil price collapse of 2014-2015 began one year ago this month (Figure 1). The world crossed a boundary in which prices are not only lower now but will probably remain lower for some time. It represents a phase change like when water turns into ice: the composition is the same as before but the physical state and governing laws are different.* For oil prices, the phase change was caused mostly by the growth of a new source of supply from unconventional, expensive oil. Expensive oil made sense only because of the longest period ever of high oil prices in...

With petroleum prices down 50 percent over the past year, many analysts and pundits are predicting the end of America’s shale oil boom. Recent headlines include: “Oil Price Fall Forces North Dakota to Consider Austerity” (New York Times);[1] “Oil Price Drop Hurts Spending on Business Investments” (Wall Street Journal);[2] “The American Oil Boom Won’t Last Long at $65 per Barrel” (Bloomberg Business);[3] and “The Shale Oil Revolution Is in Danger” (Fortune)[4]. High prices, shale skeptics argue, created a bubble of activity in unsustainably expensive shale fields. As shale-related businesses contract, consolidate, and adjust to the new price regime, a major...

The oil markets could be about to enter another round of soft prices. The OPEC decision on June 5 to leave its collective target unchanged was widely expected. As a result, oil prices barely flinched. But there are other reasons to think that oil prices could see a bit of a downturn in the coming weeks. First, OPEC revealed in its latest monthly oil report that it is still producing well above its stated 30 million barrel per day target. Saudi Arabia’s output inched up another 25,000 barrels per day in May from the month before in a further sign...

The most recent Drilling Productivity Report from the U.S. Energy Information Administration reveals that the phased impact of lower oil prices on U.S. tight oil production growth, is finally starting to show up and is expected to increase in magnitude over the next couple of months. The agency estimates crude oil production from the seven key regions in the Lower 48 states to have declined by around 44,000 barrels per day, or 0.8% month-on-month in May, and expects the decline rate to increase to around 91,000 barrels per day, or 1.7% month-on-month by July of this year. According to the...

The connection between wastewater injection wells and an alarming increase in the frequency of earthquakes is getting a lot more scrutiny these days. First was Oklahoma, which has suddenly become the earthquake capital of the United States. The number of earthquakes with a magnitude of 3.0 or higher more than quadrupled between 2013 and 2014 in the state. The culprit? Scientists are becoming more confident that the injection of wastewater into disposal wells causes fault lines to “slip,” contributing to the likelihood of an earthquake. The issue has become highly contentious in Oklahoma. But now the controversy has spread to...

There will be no US-style shale gas revolution in Europe, the president of the International Gas Union (IGU) has told the BBC."You cannot duplicate [the US experience] in Europe," said Jerome Ferrier. "Politicians are hesitating to accept shale development." Abundant shale gas in the US has helped domestic energy prices fall. As a result some European governments, not least the UK, are keen to develop their own shale resources. Mr Ferrier's comments come a day after a number of major energy firms called for a working price of carbon. Carbon pricing The IGU president, talking to the BBC at the...

Adapting the technology that powered the shale oil boom in Texas to the deserts of Saudi Arabia and elsewhere could produce 141 billion barrels of crude, research firm IHS said Thursday. Horizontal drilling and hydraulic fracturing, alongside other technological breakthroughs in recent years, could pump that much oil out of 170 older, largely unproductive fields around the world, from the Middle East to Latin America to Russia. In its initial assessment, IHS found 96 percent of the oil that could be recovered from those fields would have to be released using hydraulic fracturing, a process of blasting water, sand and...

After slashing production for months, U.S. shale-oil companies say they are ready to bring rigs back into service, setting up the first big test of their ability to quickly react to rising crude prices. Last week, EOG Resources Inc. said it would ramp up output if U.S. prices hold at recent levels, while Occidental Petroleum Corp. boosted planned production for the year. Other drillers said they would open the taps if U.S. benchmark West Texas Intermediate reaches $70 a barrel. WTI settled at $60.50 Wednesday, while global benchmark Brent settled at $66.81. An increase in U.S. production, coupled with rising...

Saudi Arabia continues to ratchet up production, taking market share away from U.S. shale producers. According to OPEC’s latest monthly oil report, Saudi Arabia boosted its oil output to 10.31 million barrels per day in April, a slight increase over the previous month’s total of 10.29 million barrels. That was enough for the de facto OPEC leader to claim its highest oil production level in more than three decades. Saudi Arabia has increased production by 700,000 barrels per day since the fourth quarter of 2014 in an effort maintain market share. The resulting crash in oil prices is forcing some...

Overseas competitors who were caught off-guard initially by rising US unconventional crude oil production have increased their own outputs now and can be expected to try and keep prices low to protect their global market shares, speakers at a May 12 Atlantic Council discussion said. That could make marginal US unconventional properties uneconomic, but won’t threaten the new US position as a major producing nation, they agreed. “We’re entering a phase when all the excess capacity will be resized to the new US world market share,” said Subash Chandra, managing director and senior equity analyst at Guggenheim Partners. “I don’t...

As a response to lower oil prices, E&P companies have guided considerable cuts in their 2015 investment budgets. Preliminary budgets indicate a ~20% drop in global E&P investments this year, with shale declining the most. Observing historical trends, Figure 1 shows global investments for offshore and shale oil and gas. During the past decade, offshore investments have increased from ~ US$150 billion in 2005 to ~ US$360 billion in 2014. The growth in offshore investments is a combination of higher activity and higher unit costs (i.e., rig rates). Also over the last 10 years, shale activity accelerated as horizontal hydraulic...

Major improvements by natural gas exploration-and-production companies have allowed them to continue to drill profitably in a period of depressed prices, adding to the glut of gas and putting further pressure on prices, an E&P executive said Wednesday at the IHS CERAWeek conference in Houston. "What's happening is that we continue to get better and get more production per rig," Kyle Mork, president of Energy Corporation of America, said in reference to the seeming paradox of growing US natural gas production despite a record low level of rigs. "We're the problem," he said. It is common knowledge in the industry...

Oil Price War May Benefit Both US Shale And Saudi Arabia

Has billionaire oil man Harold Hamm ever been tempted to take the U.S. shale revolution abroad and expand his oil empire from North Dakota to the rest of the world? “I have not,” Hamm told a gathering of energy executives Tuesday. The question had come from Daniel Yergin, vice chairman of IHS. Hamm, CEO of Continental Resources, one of the biggest oil producers in the Bakken Shale, was one of three oil-company chief executives speaking from the stage during a panel at the IHS CERAWeek energy conference at the Hilton Americas-Houston. So why haven’t U.S. shale producers tried to tap...

Siluria Technologies’ new ethylene plant is a 4-story-tall maze of pipes and valves and pressure vessels. If it were a standalone plant it might be impressive. But this one is tucked in among dozens of giant petrochemical complexes along the Houston Ship Channel and situated within a larger polypropylene site operated by Brazilian chemicals giant Braskem So how does this facility stand out? Because it’s unique. All the rest of the world’s ethylene is made the old-fashioned way: by breaking apart larger hydrocarbons such as naphtha (sourced from crude oil) or ethane (found in natural gas). In contrast, Siluria’s technology...

EIA is currently in the process of updating maps of major tight oil and shale gas plays, including the Eagle Ford and Marcellus plays, which will help to better characterize the geology of key areas of production in the United States. EIA's most recent maps focus on shale and tight oil plays, and characterize plays based on geologic characteristics, including rock type and age. Understanding geologic history and processes helps exploration and production companies reduce the risk of drilling dry, nonproducing wells and better understand hydrocarbon resource potentials. Production of crude oil and natural gas occurs in two classes of...

ROSWELL – Gasoline prices in New Mexico could drop to as low as $1.60 a gallon this year as the United States and the Organization of Petroleum Exporting Countries engage in an outgoing crude oil price war, an expert told the New Mexico Landmen’s Association on March 27. Dr. Daniel Fine, associate director of the New Mexico Center for Energy Policy at New Mexico Institute of Mining and Technology, said at the landmen’s association’s monthly meeting recently that crude oil storage in the United States is at a near maximum, meaning it will be some time before crude oil prices...

Energy: New federal regulations on fracking on public land ignore a study documenting that methane found in well water is unrelated to the location of hydraulically fractured oil and gas wells. When the Obama administration recently released its new regulations on fracking — regulations that it said were needed to keep up with the advance and success of the decades-old technology to meet public safety needs — the Independent Petroleum Association of America and Western Energy Alliance immediately filed suit, saying that the new regs were based on "unsubstantiated concerns" that lacked any scientific basis. "Hydraulic fracturing has been conducted...