Countries outside the US and Canada have vast quantities of hydrocarbons yet to be tapped from shale formations, said a June assessment released by the US Energy Information Administration, which commissioned Advanced Resources International Inc. to compile the updated report.
An initial EIA-ARI global shale gas assessment was released in 2011, and that report did not estimate shale oil resources. The 2013 update estimated 7,299 tcf of technically recoverable shale gas worldwide, a 10% jump from the 2011 estimate. The 2013 estimate listed 345 billion bbl of technically recoverable shale oil.
The updated shale estimate indicated 10% of the world's total estimated technically recoverable oil resources are in shale or tight formations, and 32% of the world's technically recoverable gas are in shale formations. Shale resource estimates likely will change as additional information becomes available.
EIA Administrator Adam Sieminski said, "The extent to which technically recoverable shale resources will prove to be economically recoverable is not yet clear."
Economical recovery depends on drilling and completion costs, the volume of oil or gas produced during an average well's life, and oil and gas prices.
Only the US and Canada have produced shale oil and shale gas in commercial volumes so far. The 2013 report said more than half of the non-US shale oil resources are in Russia, China, Argentina, and Libya. More than half of the non-US shale gas resources are in China, Argentina, Algeria, Canada, and Mexico.
The EIA-ARI 2013 report analyzed 95 basins in 41 countries, including 137 formations although not all formations had sufficient information to provide firm estimates. The report did not include every basin, and it excluded some Middle East and Caspian regions (see table).
The report covered the most prospective shale formations in 41 countries that demonstrated some level of relatively near-term promise, and that had enough geological data for a resource assessment.
"Further improvements in both the quality of the assessments and an increase in the number for formations should be possible over time," said the report, "World Shale Gas and Shale Oil Resource Assessment."
Changes in shale gas estimates
Shale gas resource estimates for some formations were lowered in the 2013 assessment.
Downward revisions include Norway's Alum shale, Poland's Lublin basin, Mexico's Eagle Ford shale in the Burgos basin, South Africa's Karoo basin, and China's Qiongzhusi shale in the Sichuan basin as well as the Lower Cambrian shales in the Tarim basin.
Some adjustments were based on new information while some reflected a reclassification of resources to oil and condensates from gas.
Norway's shale gas assessment dropped to zero in the 2013 report compared with 83 tcf in 2011, triggered by Royal Dutch Shell PLC's disappoint results from three Alum shale wells drilled in Sweden.
The Alum shale is less geologically complex in Sweden than in Norway. Disappointing results in Sweden significantly reduced the likelihood for successful shale wells in Norway's complex Alum shale, ARI said.
For Poland, the shale gas estimate was 148 tcf in the 2013 assessment compared with 187 tcf in the 2011 report (see map, OGJ, Nov. 7, 2011).
Poland's Lublin basin shale gas estimate was cut to 9 tcf from 44 tcf based upon a 2013 report requirement that a shale formation have at least a 2% minimum total organic content (TOC).
"The more rigorous application of the TOC minimum requirement—along with better control on structural complexity—reduced the prospective area from 11,660 sq m to 2,390 sq m," the 2013 report said.
In Mexico, the Eagle Ford shale gas estimate in Burgos basin was reduced to 343 tcf from 454 tcf while the prospective shale area was reduced to 17,300 sq m from 18,100 sq m. Part of the 17,300-sq-m area is prospective for oil, which reduced the area prospective for gas.
For South Africa, the shale gas resource estimate was reduced to 390 tcf from 485 tcf. The prospective area for three shale formations in the Karoo basin was reduced to 60,180 sq m from 70,800 sq m.
For China as a whole, the shale gas resource estimate was reduced to 1,115 tcf from 1,275 tcf in the 2011 report.
More information on TOC and geologic complexity caused a reduction of the shale gas resource in the Qiongzhusi formation in the Sichuan basin and Lower Cambrian shales in the Tarim basin. The Qiongzhusi shale gas resource estimate was reduced to 125 tcf in the 2013 assessment from 349 tcf in the 2011 report. The prospective area was reduced to 6,500 sq m from 56,875 sq m.
Similarly, the prospective area of the Lower Cambrian shales was reduced to 6,520 sq m from 53,560 sq m in 2011, triggering a cut in the shale gas estimate to 44 tcf from 359 tcf.
EIA-ARI said it updated the shale resources assessment so soon because geologic research and well results unavailable for use in the 2011 report allowed for a more informed evaluation of shale formations covered in that report. In addition, the 2013 assessment included additional shale formations.
The methodology relies on geological information and reservoir properties assembled from the technical literature and data from publically available company reports and presentations. ARI augmented publically available information by ARI's internal (non-confidential) proprietary work.