In our exporting LNG blog post, we discussed how the U.S. shale boom may cause the U.S. to become an LNG exporter in the near future. The success of shale in North America has also sparked interest in other parts of the world, including Europe, Asia, and Australia.
As you can see in the chart above, there is potential for shale production in many countries. In about ten years, it is expected there will be limited production in Europe and Asia, however in twenty years, gas production from shale outside of the US, may be a significant part of the global oil and gas market.
U.S. independent operators and service and supply companies have led the shale effort in North America, and now their knowledge and technology is being used in international operations. Still, there are key differences between the U.S. and other countries that will create unique challenges in production after the testing phases are complete.
Worldwide Shale Potential: Geological and Technological Differences
The U.S. has the most developed shale production, so technologies are likely to be developed here and then exported abroad. These technologies include better reservoir characterization capabilities, alternative non-toxic fluids for fracking, and fracking technologies and processes that reduce the amount of water needed to increase gas flow rates.
However, not all countries are operating under the same factors as the U.S. The U.S. has favorable geology: shale is arranged in a neat horizontal layer that makes it easier to get to gas. European and Asian fields have more faults and the various layers have slipped so they are not parallel. Additionally, the U.S. has private land and open geological records that make it easy to know where shale is and easy to pay landowners for access. In many other countries, the shale lies in public lands that are harder for companies to explore, and in China, for example, geological knowledge is known only to the government.
Additionally, the international shale market lacks the necessary infrastructure and water resources. Some countries, such as France, are voicing concerns over environmental impacts of drilling.
Emerging International Shale Plays
U.S.-based independent companies are leading the global shale play efforts. Global exploration is at an early stage, but several promising shale plays are apparent.
The Eagle Ford play in Texas extends into Mexico. If Mexico decides to operate there, they would have an oil and gas investment to add to their deepwater drilling.
Argentina, Australia, and Poland are also testing wells. Some analysts think that the Neuquen Basin in Argentina will be the first international shale play with commercial output because it has a large number of U.S. independents and a few majors who are bringing their expertise to the area. Last year, U.S. independent Apache reported that it completed the first horizontal multi-stage hydraulically fractured shale gas well in South America.
The Arthur Creek formation in Australia is close behind Argentina. This formation is similar to the Bakken shale play in North Dakota. Arthur Creek is a huge shale play with an estimated 26 billion barrels of oil and another 1 billion barrels in conventional carbonates. Petrofrontier is currently operating there.
In Europe, Poland has high potential for shale gas. The country has thick, laterally extensive Silurian shale plays, as well as a stable political environment and reasonable fiscal terms that make the country attractive for independent operators.
China still operates on a mostly coal economy, but this year expressed interest in bringing U.S. expertise into the country for possible operations on one of their large shale plays.
Oil and Gas Professionals Operating in Shale
The international interest in shale is providing oil and gas professionals with new opportunities. It also means that some professionals who came to the U.S. from abroad might be able to return to their countries to work. In any case, the demand for shale will continue to offer job security to experienced professionals in current and future plays.
Clover specializes in placing professionals in the oil and gas industry. If you are an Operator seeking to augment Project Teams, contact Jeff.W@clovergs.com
If you are an experienced professional looking for opportunities in the Upstream Industry (Alaska, Eagle Ford Shale Play, Bakken Formation, Deepwater Gulf of Mexico), send your resume in complete confidence to Chris.S@clovergs.com