Why Canada is a subsequent limit for shale oil
The series in U.S. shale oil has smashed Canada’s ardour attention in new years, finale dual decades of fast enlargement and pursuit origination in a nation’s immeasurable oilsands.
Now Canada is looking to a possess shale fields to correct a mercantile damage.
Canadian producers and tellurian oil majors are increasingly exploring a Duvernay and Montney formations, that they contend could opposition a many inclusive U.S. shale fields.
Canada is a initial nation outward a United States to see large-scale expansion of shale resources, that already comment for 8 per cent of sum Canadian oil output. China, Russia and Argentina also have plenty shale pot though have nonetheless to overcome a obstacles to full blurb development.
Canada, by contrast, offers many of a same advantages that authorised oil firms to launch a shale series in a United States: countless private ardour firms with ardour for risk; low collateral markets; infrastructure to ride oil; low race in regions that enclose shale reserves; and abundant H2O to siphon into shale wells.
‘It’s formidable’
Together, a Duvernay and Montney formations in Canada reason commercial resources estimated during 500 trillion cubic feet of healthy gas, 20 billion barrels of healthy gas liquids and 4.5 billion barrels of oil, according to a National Energy Board.
“The Montney is suspicion to have about half a recoverable resources of a whole oilsands region, so it’s formidable,” Marty Proctor, arch executive of Calgary-based Seven Generations Energy, told Reuters in an interview.
Canada’s shale outlay stands during about 335,000 bpd, according to ardour consultants Wood Mackenzie, that forecasts outlay should grow to 420,000 bpd in a decade. The gait of outlay expansion could energise and a estimated stretch of a resources could arise as activity picks adult and believe of a fields improves, according to a Canadian Association of Petroleum Producers.
Seven Generations and Encana Corp, also formed in Calgary, are among heading producers building a dual regions. Global majors including Royal Dutch Shell and ConocoPhillips — who pulled behind from a oilsands last year — are also building Canadian shale assets.
Chevron Corp announced a initial ever Canadian shale expansion in a Duvernay in November. Spokesman Leif Sollid called it one of a many earnest shale opportunities in North America. ConocoPhillips sees intensity for a Montney to deliver poignant prolongation and income upsurge to a company, executive clamp boss of prolongation drilling and projects Al Hirshberg pronounced in November.
Shell will deposit some-more income this year in a Duvernay than any other shale margin solely a Permian Basin in West Texas, the many prolific U.S. shale play, orator Cameron Yost said.
“We might learn something in a Permian that becomes germane in a Montney, and clamp versa,” Yost said.
Oilsands era
The oilsands bang dates behind dual decades, when improved technology, rising wanton prices and fears of tellurian oil shortages sparked a rush to rise a world’s third-largest reserves. But in a final 5 years, most of that investment has migrated south as U.S. shale firms pioneered new drilling techniques and flooded tellurian oil markets with cheaper-to-produce crude.
The oilsands now comment for two-thirds of Canada’s 4.2 million barrels per day of crude. They will continue to apportion heavily to Canada’s ardour outlay given oilsands projects, once built, furnish for decades.
But a epoch of oilsands mega-projects will approaching finish with Suncor Energy’s 190,000 barrel-per-day Fort Hills mining project, that started producing this month.
Canadian ardour officials are now counting on shale, also famous as “tight” oil, to captivate new investment.
“Increasingly we are going to see light parsimonious oil and liquids-rich healthy gas combining a pivotal partial of Alberta’s ardour future,” pronounced Margaret McCuaig-Boyd, ardour apportion for a range where a oilsands and most of a nation’s shale pot are located.         Â
A destiny in fracking
Oilsands expansion gathering Alberta’s mercantile expansion during a rate of 5.5 per cent annually between 2010 and 2014, about twice a inhabitant rate. But a oil cost pile-up in 2014 sent a segment into a retrogression and has given stirred producers to throw during slightest $32 billion in designed projects.
Oilsands collateral spending fell for a third true year in 2017 while other oil and gas investment rose 40 per cent from 2016 to about $31 billion, according to a Canadian Association of Petroleum Producers. Spending outward a oilsands is approaching to grow again this year to $33 billion, scarcely 3 times a volume likely for oilsands investment.
Hydraulic fracturing of shale oil and gas can produce quicker returns on smaller investments than extracting tar-like bitumen from a oilsands. Shale prolongation is also reduction carbon-intensive, addressing a vital regard among general investors demure to financial what environmental groups deride as a “tar sands”.
“The final decade has been dominated by conversations about the oilsands, and people have maybe missed a opportunities” in shale fields, Encana Chief Executive Doug Suttles told a discussion in British Columbia in November. “All these things have a most reduce CO footprint than a normal barrel refined today.”
‘Absolutely huge’ potential
The Duvernay in executive Alberta is a shale play, while the Montney, straddling northern Alberta and British Columbia, is technically a arrangement of siltstone, a some-more porous rock. Drilling and descent techniques are a same, however, and many in a attention use a tenure shale for both.
Drillers face hurdles in both fields given of their stretch from pivotal markets, though a high intensity of their pot is unquestioned.
The Duvernay is allied to a Eagle Ford shale margin in South Texas. The Montney is unique, with a outrageous gas resources and intensely thick stone arrangement containing several opposite levels during that oil and gas can be drilled, pronounced Mike Johnson, technical personality of hydrocarbon resources for the National Energy Board.
Weak prices in an oversupplied healthy gas marketplace have hampered development, along with combined costs of shipping from the far-flung fields and singular ability on pipelines. That creates it harder to contest with producers in shale gas plays such as a Marcellus in a northeastern United States.
Meanwhile, due Canadian liquefied healthy gas trade terminals on a west coast, that were approaching to yield a outrageous source of demand, have been cancelled or stalled due to diseased prices.
Such obstacles, however, have not stopped producers from staking claims in a region. Last year, Alberta oil and gas land sale prices reached levels not seen given 2014 given of a rush to buy land in a Duvernay East Shale Basin.
“The intensity is positively huge,” pronounced Mark Salkeld, boss of a Petroleum Services Association of Canada. “The usually thing holding us behind is entrance to marketplace and a cost.”
(Additional stating by Ernest Scheyder in Houston; Editing by Simon Webb and Brian Thevenot)Â
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Article source: http://www.cbc.ca/news/canada/calgary/canada-shale-oil-production-1.4508484?cmp=rss