Currently only four countries produce commercial amount of shale resources
The shale revolution has unlocked tremendous natural resource potential in the United States and Canada, with other countries trying to take advantage of shale gas and tight oil. As recently as last year, only four countries in the world were producing commercial volumes of either shale gas or tight oil, reports the Energy Information Administration (EIA).
In the EIA’s 2013 World Shale Gas and Shale Oil Resource Assessment, the administration noted exploration and drilling in China and Argentina are expanding. For the last two years, China has drilled more than 200 wells, and Argentina has drilled more than 275 wells. Each country has the potential to significantly increase production of shale gas and tight oil, according to the EIA.
In Argentina, much of the drilling activity has targeted shale oil and natural gas in the Neuquen Basin’s Vaca Muerta shale formation, located in west-central Argentina. National energy company Yacimientos Petroliferos Fiscales (YPF), the largest shale operator in the country, reported production in April 2015 of 22.9 MBOPD of oil and 67 MMcf/d of natural gas from three joint ventures in Vaca Muerta: one with Chevron (ticker: CVX) at the Loma Campana field, a second one with Dow Chemical (ticker: DOW) at the El Orejano field, and a third joint venture with Petronas at La Amarga Chica field.
China’s national oil company Sinopec (ticker: SNP) and Russia’s state-owned oil giant Gazprom (ticker: OGZPY) recently signed a memorandum of understanding with YPF to jointly develop shale from the same basin.
Much of the shale development in China has been led by state-owned companies like Sinopec and China National Petroleum Corporation’s (CNPC) PetroChina (ticker: PTR). According to China’s Ministry of Land and Resources, these two companies are on schedule to reach 600 MMcf/d of natural gas production by the end of 2015.
CNPC has drilled 125 shale wells, bringing 74 of them into production, and is on schedule to produce 250 MMcf/d of shale gas by the end of the year. SNP currently produces 130 MMcf/d from the Fuling shale field in the Sichuan Basin. By the end of 2014, Sinopec completed 75 test wells at the Fuling field, with plans to drill an additional 253 wells.
More countries are exploring shale opportunities
While there are currently only four countries globally producing commercial volumes of either natural gas or oil from shale formations, many other countries are trying to follow suit. Shale exploration in Mexico has been particularly active, with portions of the Eagle Ford Shale extending south into the country.
In May of this year, national oil company PEMEX released the results for 13 of its shale exploration wells, categorizing 10 as commercially viable. These 10 wells will have initial production ranging from 2 to 11 MMcf/d. The company also plans to complete three wells it drilled into the Tampico-Misantla Basin’s Pimienta formation this year.
Other countries have met with less success in exploring for shale oil and gas. Earlier this month, ConocoPhillips (ticker: COP) announced that it would join other global oil majors in ending its shale exploration operations in Poland, leaving only the Poland’s state-owned PGNiG and PKN Orlen looking for commercially viable shale opportunities in the country.