By OGJ editors
HOUSTON, Feb. 22 -- Edinburgh-based consultancy Wood Mackenzie Ltd. estimates unconventional hydrocarbons resources of 3.6 trillion boe worldwide.
Unconventional resources include heavy oil, tight gas, coalbed methane, oil sands, and shale oil. WoodMac sees them playing a key role in the future world oil and gas supply mix.
In its study, "Unconventional HydrocarbonsThe hidden opportunity," WoodMac said anticipated tightening global oil supply and tightening regional gas supply intensify the demand for unconventional oil and gas.
Recent high commodity prices are driving future development of unconventional assets. Development so far has focused on Canadian oil sands and US unconventional gas. "In the future, we believe that we will see more global development of these unconventional hydrocarbons," said WoodMac analyst Rhodri Thomas.
Heavy oil development is seen as being particularly competitive and likely to be successful if the technologies can be proved and can remain viable for the long term.
Future energy mix
WoodMac said unconventional oil is expected to supply at least 20% of oil production by 2020 compared with less than 10% of total worldwide oil production today.
Unconventional gas, meanwhile is expected to make up 42% of US gas supply in 2010, up from 27% in 2005.
Canadian oil sands production is expected to quadruple from today's level to 4 million b/d by 2020.
Meanwhile in the US, oil shale deposits in Utah, Wyoming, and Colorado are attracting renewed interest. Companies will need both technology and a thorough understanding of the subsurface, the study said.
WoodMac identified technical, fiscal, and environmental challenges before unconventional development can proceed. "As unconventional resources are distributed widely around the globe, the key risk is not discovering the resource, but in identifying areas where the critical factors are in place to enable economic development," said Phaedra Powilanska-Burnell, WoodMac analyst.
Regional and country-specific factors must be taken into account, the study said. Independents traditionally dominated unconventional oil and gas plays in the US and Canada. But integrated companies are beginning to take larger stakes in such projects.
"With conventional non-OPEC supply expected to peak within the next decade and the difficulties in discovering accessible gas reserves, international oil companies with growth ambition cannot afford to ignore these unconventional resources," Powilanska-Burnell said.