December 2023
Industry leaders' outlook for 2024

Going global with unconventionals

To ensure a thriving civilization, it is crucial to embrace a diverse energy portfolio that includes both renewable sources and unconventional resources, leading us toward an energy-rich and sustainable future. 
Douglas N. Valleau / Contributing Editor
King Hubbert predicted peak oil around 1970, and, indeed, he was correct. What Hubbert couldn’t envision was the leap in technology that allowed access to tight, low-permeability rock, reversing the peak oil trend. Chart: EIA.

From the early days of the "basin-centered trap," a term coined in the mid-1970s following the discovery of super-giant Elmworth field in Canada, unconventional resources have captivated both geoscientists and engineers. Initially considered a rare anomaly, the Barnett shale play in the Texas Fort Worth basin emerged in 1981, stunning the industry with its vast reserves of over 50 Tcf of gas, accompanied by more than 170 MMbbl of oil and 176 MMbbl of NGLs. Since then, horizontal drilling and multi-stage hydraulic fracturing, which propelled the success of unconventional resources, has revolutionized the American oil industry, debunking Hubbert's gloomy prediction of peak oil, Fig. 1. 

Following the Barnett's lead, the United States witnessed the discovery of numerous, highly productive unconventional plays, such as the Eagle Ford, Bakken, Haynesville, Niobrara, Woodford, Marcellus and Utica, as well as the revitalization of the Midland and Delaware basins. Yet, the question arises: What about other countries? Why not share this revolutionary technology and explore unconventional resources on a global scale? Surprisingly, an examination of technically recoverable unconventional resources worldwide reveals the staggering potential of 388 Bbbl of oil and 8,158 Tcf of gas, Fig. 2. 

Global estimate of unproved technically recoverable oil and gas from unconventional formations. Chart: Multiple sources.

The global movement. Several countries are now venturing into development of their unconventional resources. To date, five countries have achieved commercial production. Canada boasts three commercial plays: the Triassic Montney/Doig, the Devonian Duvernay shale, and the Devonian Muskwa and Otter Park shales. These three plays, alone, hold the potential for over 500 Tcf of gas and 18 Bbbl of oil.  

In South America, Argentina's Cretaceous Vaca Muerta shale has already exceeded 90,000 bopd and 1.7 Bcfgd, extracted from approximately 600 wells. Argentina’s resource potential of over 800 trillion cubic feet of gas and 27 billion barrels of oil is impressive, plus the Vaca Muerta bears a resemblance to the Eagle Ford, exhibiting a deep gas zone, a mid-dip condensate zone, and an up-dip oil zone.  

Russia's Jurassic Bazhenov shale holds the largest shale potential globally, with 63 Bbbl of oil and 284 Tcf of gas, covering an area equivalent to the Great State of Texas. However, limited capital investment has hindered production, which currently stands at 8 MMbpd.  

In the Middle East, Saudi Arabia is developing the Jafurah shale gas project, situated east of the giant, conventional, Ghawar oil field. Jafurah field is projected to contain over 200 Tcf of wet gas from the Tuwaig Mountain formation. Saudi Aramco already has drilled over 150 wells as part of its exploration and appraisal program, utilizing 5,000-ft horizontal completions and desalinated sea water for hydraulic fracturing. Commercial production from Jafurah is anticipated to commence in 2026.  

In China's Sichuan basin, the Fulling shale gas field, discovered in 2014, is expected to yield 74 Tcf of gas, with over 1.4 Tcf already produced. Additionally, the Weirong shale gas field in the same basin, discovered in 2016, currently produces over 123 MMcfgd. 

Honorable mentions: Several countries are currently in the exploration phase, yielding promising results. Australia's Cooper basin houses the Nappamerri Trough Natural Gas Project, designed to unlock the shale gas resources of the region. Two successful vertical exploration wells have been drilled, yielding over 3 MMcfd and demonstrating viable resource potential. Similarly, the Beetaloo basin is often cited for its Mesoproterozoic Kyalla and Velkerri shales, which have shown gas flow during early tests but await demonstration of commercial potential.  

India's Carin Oil & Gas has announced a $500 million investment in a shale oil development project within the Rajasthan oil field. Encouraging results were obtained from the first vertical shale well drilled in 2022, prompting Cairn's plan to appraise the discovery with two additional shale wells in 2024.  

In Egypt, the Cretaceous Abu Roash “F” limestone, a known source rock, is undergoing testing by Tag Oil in the Western Desert, yielding early encouraging results. Notably, five out of eight tests of the Abu Roash source rock in the Western Desert have successfully flowed oil. 

Fig. 3. Current status of European hydraulic fracturing operations. Chart:

No fracing in my backyard: Despite tremendous potential, various countries face environmental activism and political hurdles that have resulted in bans on the utilization of advanced technologies to unlock unconventional resources, Fig. 3.  

Western Europe is estimated to hold over 260 Tcf of gas and 9 Bbbl of oil; however, France and Germany banned all hydraulic fracturing in 2011. Spain could hold 8 Tcf of unconventional shale gas. The Spanish authority actually granted over 70 shale gas permits, only to later renege by adopting a national climate neutrality goal of 100% renewable energy. 

In the UK, Cuadrilla Resources drilled Britain's first modern shale gas well in 2010. The well was hydraulically fractured, but it suspended operation when two minor seismic events of 2.3 and 1.5 magnitude were triggered. Consequently, the government imposed a moratorium on hydraulic fracturing and ordered Cuadrilla to cease operations and plug the well.  

In the Americas, Mexico, with an extension of the prolific Eagle Ford, and Colombia, with its untapped La Luna formation, have both experienced limitations, due to environmental activism. 

Global challenges. Beyond the requirement for suitable geology, various factors present challenges for exploiting shale resources outside the U.S. These include not only the forementioned environmental activism, but also issues related to land ownership rights, regulatory and permitting processes, cooperation with local communities, access to abundant water resources, availability of skilled drilling crews, and the necessary infrastructure to transport products to the market.  

With the global population projected to exceed 9 billion people by 2040 and the consequent increase in energy demands and agricultural production requirements, fossil energy must remain a significant component of the energy solution. While renewable power sources have their benefits, they are intermittent, unreliable, and possess low energy-density. Moreover, renewable power, alone, cannot fulfill the demand for petrochemicals or fertilizers necessary for global food production.  

Final thoughts. Exploration and development of unconventional resources have transformed the American oil industry and sparked a global movement toward tapping into these vast reserves. While the U.S. has successfully unlocked the potential of many unconventional plays, other countries are now venturing into commercial production as well. However, environmental concerns and regulatory challenges pose obstacles in some regions, hindering the utilization of advanced technologies like hydraulic fracturing.  

As the global population continues to grow, fossil energy, including unconventional resources, remains an essential component of meeting the global energy demand, provide pharmaceuticals, and support agricultural production. To ensure a thriving civilization, it is crucial to embrace a diverse energy portfolio that includes both renewable sources and unconventional resources, leading us toward an energy-rich and sustainable future. 

About the Authors
Douglas N. Valleau
Contributing Editor
Douglas N. Valleau is President, Strategia Innovation and Technology Advisors, LLC, and Senior V.P., Business Development, at Piri Technologies LLC. He works with energy professionals to provide geoscience and reservoir characterization, IOR, EOR and CCUS evaluations, expert testimony, and equity determination. In collaboration with Piri Technologies, Mr. Valleau provides two- and three-phase, full-reservoir conditions core flood experiments, with simultaneous CT scan to reveal the full physics of fluid flow through porous media. He helps clients identify innovation in geoscience and petroleum engineering to explore strategic ways to achieve the energy transition focused on value, growth and sustainability. Prior to Strategia, Mr. Valleau was Chief Geologist and Director of Unconventional Technology for Hess Corporation. He has held various management and geoscience and engineering positions with ConocoPhillips, Burlington Resources, Maxus, BHP Billiton, Monsanto, and Gulf Oil. He is a member of SEG, SPE, AAPG, Society of Professional Well Log Analysts, and the Houston Geological Society. Mr. Valleau is a certified petroleum geologist, registered in the State of Texas, and he holds a Master’s degree in geoscience from the University of Florida in 1977.
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