(EnergyAsia, March 15 2013, Friday) — Unconventional hydrocarbon sources will play an increased role in meeting the world’s growing energy demand which is expected to reach 113 million b/d of oil equivalent (boed) by 2040, a 30% increase over 2010 levels, said Exxon Mobil in its latest annual outlook for the sector.
With increased use of improved technology, hydrocarbons from deepwater sources, tight shale formations and Canada’s oilsands will provide the new barrels to offset an expected decline of supply from conventional crude oil production in both OPEC and non-OPEC countries.
The US major predicts that by 2040, conventional sources will account for only 55% of the world’s liquid supply, with the rest supplied by deepwater, tight oil and natural gas liquids (NGLs) as well as oil sands and biofuels. Until the last decade, deepwater sources and tight formations did not figure prominently on the world’s oil supply picture.
The development and application of improved technology has enabled companies to find, develop and deliver previously unavailable new supplies of oil and gas in unconventional terrains, said the US major which is among a few of the world’s top energy companies helping to tap the new resources.
“The world continues to hold significant oil resources. Even by 2040, ExxonMobil estimates that less than half of the world’s recoverable crude and condensate will have been produced. Even with production, the resource base continues to grow due to the ability of the industry to find and develop new types of resources through improved science and technical innovations,” it said.
North America will provide a “dramatic rise” in supply, thanks to a projected combined 40% growth from tight oil flows from the Bakken formation in North Dakota, deepwater developments in the Gulf of Mexico and Canada’s oil sands.
Total Latin American liquids production will almost double as a result of projects in Brazil’s deepwater acreages and Venezuelan oil sands.
The Middle East will see a 45% supply boost from continued growth in conventional liquids along with NGLs and tight oil developments, while Africa’s output will be boosted by large deepwater developments in Angola and Nigeria.
“Unconventional resources found in shale and other tight rock formations were once considered uneconomic to produce. Today, technology is helping unlock these resources in North America, with growing opportunities around the world,” said the Exxon outlook report.
“In recent years, a combination of two technologies in use for decades – horizontal drilling and hydraulic fracturing – has enabled the energy industry to economically access and produce natural gas and oil found in shale and tight rock.
“Horizontal drilling allows a well to be drilled horizontally underground for thousands of feet, providing greater access to reservoirs to enhance and maximise productivity and economic resource recovery. This drilling practice also reduces the environmental footprint by enabling the drilling of multiple wells from a single location.
“In hydraulic fracturing, a solution – primarily water and sand, mixed with a small amount of chemicals – is injected into the rock thousands of feet underground to open very thin cracks, allowing trapped natural gas and oil to migrate to the well.
This technology has been used safely in more than one million wells worldwide for the past six decades.
“Together these two technologies have unlocked vast new supplies of natural gas and oil, which otherwise would not have been commercially viable.”