Is the World on the Verge of a Shale Oil Boom?

Page 1 of 2

According to a new report from research firm IHS Global Insights, the world may be on the verge of a shale energy boom. But before investors get too excited, it’s important to remember that oil and gas drilling will depend more on market forces than what’s in the ground.

There’s big potential…
There’s a lot of excitement as to whether North America’s shale energy boom could be replicated internationally. New drilling techniques like hydraulic fracturing and horizontal drilling techniques have unlocked vast quantities of hydrocarbons. Explosive growth from formations like the Texas Eagle Ford and the North Dakota Bakken has driven U.S. oil production to its highest level since May, 1989. Previous studies by IHS have shown North America has about 43 billion barrels of commercially recoverable tight oil.

Exxon Mobil Corporation (NYSE:XOM)But the group’s latest report suggests that shale formations outside of North America potentially hold seven times this amount. The study identified 143 global shale plays that have a combined 300 billion barrels of technically recoverable oil. The report makes it clear: the potential for shale oil globally is huge.

And the IHS isn’t the only research outfit praising shale’s international promise. In June the EIA echoed a similar sentiment when it reported that shale makes up 30% of the world’s technically recoverable natural gas and 10% of the world’s crude oil.

…but don’t pop the cork yet…
But these impressive figures above come with an asterisk. The report indicates potential for international shale oil and gas, but the extent to which these technically recoverable reserves will be profitability exploited remains unclear. Already, hype surrounding shale plays outside of the United States have failed to materialized.

Five years ago there was lots of excitement surrounding Poland’s vast natural gas deposits. Companies like Exxon Mobil Corporation (NYSE:XOM)Chevron Corporation (NYSE:CVX), ConocoPhillips (NYSE:COP), and Marathon Oil Corporation (NYSE:MRO) flocked to the country after the government started offering incentives to attract foreign investment.

But no boom materialized. Last year, ExxonMobil pulled the plug on its exploration program in the country after two pilot wells failed to yield commercial results. The company is looking to sell its stakes in four shale concessions there. In May, Marathon Oil announced that it was pulling out of Poland as well. The company is looking for options to dispose its 11 licences after the search failed to produced commercial quantities.

China’s shale potential is also exciting. The country has 1.1 trillion cubic feet of shale gas-nearly double the size of reserves in the United States. But there too, no boom has occurred.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!