CORRECTED-Tight oil potential outside N.America is huge - study

Tue Sep 17, 2013 2:30pm EDT
 
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(Corrects last name of IHS research director in ninth paragraph to Roelofsen, not Roelofson, as first sent)

By Andrew Callus

LONDON, Sept 17 (Reuters) - Commercially recoverable reserves of tight oil in the rest of the world could be double or more those of North America and the geology of the 23 best opportunities is better in some cases, according to a new study.

The study by the analytics firm IHS nevertheless warned that development is likely to be slower than has been witnessed in the United States, held back by above-ground reasons including government policy and regulation, lack of access to specialised kit and skilled labour, and land-access constraints.

Other studies making similar forecasts have also highlighted such barriers and the potential for higher costs.

According to the Financial Times, the IHS study puts the cost of the average well outside North America at $8 million compared with $5.6 million inside North America, ranging from $6.5 million in Australia to more than $13 million in parts of the Arabian Peninsula.

The study, outlined in a news release by IHS, maps the potential for "tight" or unconventional oil without the benefit of well data and so has estimated only what are known as "technically recoverable" reserves outside North America.

Tight or unconventional oil requires the same hydraulic fracturing and horizontal drilling techniques as shale gas. Like shale gas, it has become a boom U.S. industry, transforming the economy through cheaper energy and reduced reliance on imports, leading other countries to look at developing similar reserves.

The study found that more than half the global technically recoverable reserves outside North America were concentrated in just 23 of 148 potential development areas it analysed. It put the total at 300 billion barrels, with 175 billion in the top 23 areas - known as "plays" in the oil and gas industry.   Continued...