From the four pillar of success to the

Transcription

1 The shale oil & gas american revolution From the four pillar of success to the four leverages of exportation. By Philippe Charlez Total Exploration Production thias / Total Kuch Latt

2 US oil & gas production and imports First oil crisis Second oil crisis Oil counter shock First gulf war Twin towers Second gulf war Energy dependency (%) % US Dependency = import/consumption pt o US production import peak oil 50% peak oil Mbbl/day 1970 Mbbl/day 2006 Production 11,3 Oil BP outlook 2014 Production 6,8 Import 3,4 25% Gas Import 13,9 Consumption 14,7 Consumption 20,7 0%

3 : the start of a revolution 70% Oil dependency d (%) Gas dependency d (%) 20% Oil (MMbbls/day) % 50% 40% Oil Gas BP outlook % 10% 5% 0% Production 6,8 10 Irak 3,14 Import 13,8 8,9 US shale oil 3,05 Consumption 20,6 18,9 US ,22 BP outlook 2014 Gas (Bcf/day) Production 50,7 66,5 Qatar 21 Import 8,8 4,8 US shale gas 35 Consumption 59,5 71,3 US ,8 20 $/MBTU Japan BP outlook 2014 Europe 5 US

4 The impact on the US economy The Winners: Source: McKinsey Corporate Performance Analysis Tool 50 Profitability (%) Midstream 25 Employment Source: IHS CERA Million jobs Upstream Downstream Direct Indirect Induced Job breakdown 25% 32% 43% 1,0 TA29 Operating costs (US$/pound) Europe Cement Glass 0,6 US Europe Source: IFRI US 0, Steel Petrochemicals Production (GPounds)

5 Diapositive 4 TA29 Source of the operating cost graph? Torello Alessandro; 19/11/2014

6 The impact on coal, GHG emissions 120 US coal consumption (Mtons/year) Power generation moved 100 from coal to gas Price Consumption % Coal price ($/ton) BP outlook US Green House Gas emissions (Gtons/year) 17% % -13% % 11% US Europe China Rest of the world BP outlook % 30% 20% 10% 1990 Gas and coal in European power mix Source : Pétrole et gaz informations N 1831 Coal BP outlook 2014 Gas 2009 to TA Germany UK Coal 12,5% 20,1% GHG 5,4% 3,3% 2012

7 Diapositive 5 TA30 I still have a doubt about these GHG numbers: CO2 emissions from the power sector in Germany must have decreased, as the sector is in the ETS. Where does this increase come from? Torello Alessandro; 19/11/2014

8 Sustainability or speculative bubble? Bakken 400 Production (boe/day 1 Production (Mbep/jour) Production Investissements(GUS$/an) ,75 Investissements 6 Marcellus 200 0,5 4 Barnett 3 Barnett Eagle-Ford Haynesville , Time (months) 70$ Barnett Haynesville Marcellus Gas production (Mboe/day) 0 Source : Wood Mac Kenzie $ Bakken Source : Wood Mac Kenzie Marcellus Marcellus 2 Source : Wood Mac Kenzie Haynesville Haynesville 1 Barnett Difference breakeven gas/oil prices Barnett (US$/boe) $ 2 0

9 Oil exchanges and LNG flux: 64% 16% 14% 75% 100 LNG capacities (Mtons/year) Source : BP outlook 2013, IEA outlook Source : IHS CERA Geopolitical consequences Oil flow to China & India US LNG to Europe Sino-Russian axis Shale gas in China LNG market 2035: 400 Mtons US: 90 Mtons in 2035

10 World shale oil & gas stakes Gas Oil Notional additional resources Gas Oil Gboe Gbbl Conventional Shale oil & gasl Additional (%) Russia Canada , US 6 Algeria China 5,661 Source : EIA Mature stage Mexico ? ,587 Pilot stage Brazil Australia Non-mature stage 27 Argentina 0 South Africa ,381

11 European stakes need an exploration phase Country Shale gas Shale oil TCF Gbbl Poland 148 3,3 France ,7 Romania 51 0,3 Denmark 32 0 UK 26 0,7 Netherlands 26 2,9 Others 50 1 Total ,9 Source : EIA 2013

12 The four exportation leverages Impressive operational performances Knowledg ge of subsurfac ce US Shale oil & gas revolution s & s Oil & gas operators services Full politic cal support Favourab ble mining rules Drilling Days 11 Lateral length Feet 4529 Well cost M$ 28 2,8 Source : Chesapeake Trial & error method (statistics) Maximise reserves Source : Total Unproductive zone Create value Optimise cost Unproductive wells Be accepted Source : SLB Terratek

13 Water use: much less than you think! 3 Energy M 3 /MWh Nuclear 2,1 Coal 1, Ground water use (Mm 3 ) Shale gas water use (%) Shale water use (Mm 3 ) Shale water use (%) 10% TA33 Gas 1 Shale gas 1, % No need of high quality water 4 Sea water 2 Water from salted aquifers 0 0% Source : Texas Water Development Board Report Trucking Coiled pipe Rigid pipe Storage

14 Diapositive 11 TA33 This graph isn't very clear. I suggest to take it out -- especially as it is about Texas Torello Alessandro; 19/11/2014

15 Water produced is handled carefully 1. Produced water (20% to 40%) is treated to be re-used No more disposal, only few re-injection Fugitive emissions 4% Drilling + fracturing + logistics 7% TA3 2. Reduce GHG Activity (extraction oil is 1) 36% Flaring & venting Electrical generation 53% Extraction oil 1 Extraction shale gas 1,5 Gas thermal usage 16 JA Costa (2011) Total, T. Stephenson (2012) IPIECA Coal thermal usage 25 J. Broderick, et al (2012) Tyndall Centre University of Manchester Allen T et al (2013) Gas power generation 33 Coal power generation 65 1 medical scanner = 100 years of Barnett Forbidden (>20) 3. Is produced water radioactive? A conventional gas well is 1 Shale gas Nuclear Coal 3 to Source : Almond S., Clancy, S.A., Davies, R.J., Worrall, F. (2014) Admitted<20 Silurien (0,4/yr) Barnett (0,1/yr) Advised (<1/yr) Full body scanner (10) Radiography back (1,5) RT Paris New-York (0,08)

16 Diapositive 12 TA34 Where is this? Torello Alessandro; 31/10/2014

17 A low footprint Pad =2x 100 m Horizontal multifractured Dep Pad during drilling (1 year) Solar panels Wind mills Equivalent energy = surface x 10 to 30 Pad during production (20 years) Source : Chesapeake

18 TA37 Europe: shale gas not a game changer, but does help the economy BP 2014 outlook - Eurostat Unit Technical Env & soc Costs Gas consomption Bcf 41,4 Tf Tcf discardsd discardsd discardsd 2035 Gas production Bcf 13,6 Gas dependency % 67,1% 95% 20 Production (bcf/day) 4 daily french consomption 15 Shale gas boom (17%) Shale gas boom : horizon 2035 Positive impact on gas and electricity prices Energy dependency -28% Economic growth +0,65 %/year Employment +1,000, daily french consomption Some shale gas (11%) Source: Poyry/OGP yy years production A30 30-year development would require: 23,000 to 50,000 wells 450 Mm 3 to 1 Gm 3 water* 230 km 2 to 500 km 2 * in 2012 France used 33 Gm 3 Source: Poyry/OGP 2013 * in 2012, France used 33 Gm 3

19 Diapositive 14 TA37 Are these the Poyry numbers? Torello Alessandro; 30/10/2014