The world has large potential technical recoverable resources of tight oil possibly several times those of North America, according to a recent geological study by global analytics firm IHS. Commercial production of these resources could equal and exceed current estimates for North America tight oil output, according to the study, which was released Sept. 17 at the IHS Forum in Houston.
The study, “Going Global: Predicting the Next Tight Oil Revolution,” confirms widespread geological potential of worldwide tight oil. In particular, the study identifies the 23 highest-potential plays throughout the world and found that the potential technically recoverable resources of just those plays is likely to be 175 billion bbl out of almost 300 billion bbl for all 148 play areas analyzed. While it is too early to assess the proportion of this that could be commercially recovered, the potential is significant compared to the commercially recoverable resources of tight oil (43 billion bbl) estimated in North America by previous IHS studies.
The growth of tight oil production has driven the recent surge in North American production. The production process applies the same hydraulic fracturing and horizontal drilling techniques that have led to a boom in the production of shale gas.
The study provides a comprehensive assessment of the potential of tight oil plays outside of North America, where well-level data does not currently exist. The study utilizes a comprehensive framework to group and analyze international plays based on their geological and depositional characteristics. Each play was then compared to its closest North American equivalent to provide the most accurate assessment of its technical potential.
“This study makes clear that the potential for global tight oil is there and that it is very, very large,” said Jan Roelofsen, IHS research director and advisor for unconventional resources. “The final measure of technical or commercially recoverable resources cannot be truly known until the actual well data is available. You simply cannot quantify it for sure until you begin to drill. But this study’s unique, data-based assessment shows that the potential of just the highest-ranking plays is likely double the size of North America’s resources, and that is a conservative estimate,” Roelofsen said.
The 23 highest-ranking tight oil plays identified by the study include well-documented areas such as Argentina’s Vaca Muerta formation, North Africa’s Silurian “hot” shales, and western Siberia’s Bazhenov shale. However, the list also includes lesser-known geological plays in Europe, the Middle East, Asia, and Australia.
Each of the worldwide plays was analyzed on key geological and geochemical characteristics such as thickness, lithology, porosity, permeability, pressure, organic richness, presence of natural fractures and oil maturity, among others.
“The comprehensive IHS screening and evaluation process revealed that 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, IHS research director and advisor for unconventional resources and project leader for the study.
While the commercial potential is not yet proven, it is clear that it is by no means limited to the highest-ranking plays, the study noted. Local market conditions, government policies and innovative exploration and production activity could drive commercial developments in a number of the 125 additional tight oil plays that were screened for the study.
Above-ground issues, including the need for a strong service sector to deliver modern rigs, specialized well completion crews and modern hydraulic fracturing equipment, as well as factors ranging from government policy, land access constraints, regulatory frameworks to water management issues will heavily influence the pace of development, the study said.
“Given the range of below and above-ground issues to be managed, launching global tight oil development outside of North America will probably be much slower overall,” said Pete Stark, IHS senior research director and advisor for unconventional resources. “But the potential is certainly there and there will be opportunities for early progress where the right conditions exist.”
