Shale Gas and Oil: Production Development and Opportunities for Promotion of the Technologies in Europe Academician of RAS E.Volkov 1
Shale gas Hard clay shale (absence of a possibility for gas motion) South America Australia Asia Low gas concentration in a unit of rock volume Weak gas g inflow to the hole North America Europe 715 trillion m 3 Geological resources, 2010 (U.S. EIA) Africa Hydraulic breaking of bed Vertical wells Gas-bearing bed Horizontal wells in gas-bearing bed Technically mineable resources, trillion m 3 China 36.7 France 5.1 Great Britain 0.6 USA 24.4 Norway 2.4 Colombia 0.5 Argentina 21.9 Chile 1.8 Tunisia 0.5 Mexico 19.3 India 1.8 Netherlands 0.5 South African Republic 13.7 Paraguay 1.8 Turkey 0.4 Australia 11.2 Pakistan 1.4 Morocco 0.3 Canada 10.9 Bolivia 1.4 Venezuela 0.3 Libya 8.2 Ukraine 1.2 Federal Republic of Germany 0.2 Algeria 6.5 Sweden 1.2 West Sahara 0.2 Brazil 6.4 Denmark 0.7 Lithuania 0.1 Poland 5.3 Uruguay 0.6 In all 2 187
Geologic features of deposits Cost of equipment Existence and quality of infrastructure Dynamics of changing daily yields in the operating period Economic indicators of mining The fast loss of well output makes it necessary the steady raising of well stock for keeping the deposit s output on the reached level that demands the significant costs Cost of shale gas extraction in USA: 120 170 $/thous. m 3 University of Pittsburg Structure of costs for shale well of Marcellus formation, USA Balance sheet account Thous. US$ Purchase of area 2200 Permitting 10 Development mining 400 Vertical drilling 660 Horizontal drilling 1220 Hydraulic fracturing 2500 Well completion 200 Output and gathering 470 At all 7660 3
Gas recovery in USA, billion m 3 Net gas 28.3 billion m 3 History Production, totally incl. shale gas Prospects 2000 2005 200606 2007 2008 2009 2010 2011 2012 544 511 524 546 571 583 611 651 681 11 17 22 42 60 88 134 217 269 % 2 3 4 8 11 15 22 33 40 Net import Shale gas Gas from deposits at land Gas of shelf deposits Methane of hard sands Methane of coal beds Associated petroleum gas Alaska Source: DOE Main conclusion for USA: Hydraulic breaking of bed - Reserves of one well in the most prospective zones: 80 140 billion m 3 ; - Yields: the initial stage- up to 500 thous. m 3, during a year reduction by 70%, then the slow drop up to 15 10%; - Productive life of a well in the most cases is 8-10 years; - A well cost is varied from 3 to 10 mln. US$; - Method of water and propane pumping (is used for intensifying inflow (granular aluminum silicates)
European ECO countries: 18.1 trillion m 3 Forecast of gas production in the European ECO countries in 2015-2035,trillion m 3 2015 2020 2025 2030 2035 DOE of USA 227 210/8 210/28 221/47 232/64 IEA (scenario of new politics) 279 259 240 222/15 213/40 Poland: 5.3 trillion m 3, 20 exploratory well (On 07.2012 ExxonMobil left off works because of absence of commercial gas inflows at the wells) France: 5.1 trillion m 3 Ecological restrictions the production of shale oil was obstructed: the technology GRP (ГРП) was prohibited since July 2011; the permissions given before were recalled (Total, VermillonEnergy, ToreadorResources, SchuepbachEnergy GasFrac Energy Services (Canada): «propane breaking» (the propane compressed to the state of gel is dissolved on the petroleum and is extracted during recovery process) Cost of shale gas production in Europe : 250 300 $/thous. m 3
China: 36.7 trillion m 3. Basins Sichuan, Tarim Forecast of gas production in China in 2015-2030, trillion m 3 2015 2020 2030 Gas from tight collectors 50 100 150 Shale gas 5 80 150 Methane of coal bed 10 50 80 Gas from traditional sources 80 120 170 Общий объем добычи газа 145 350 550 100% 90% 80% 34% 31% 70% 55% 60% 14% 15% 50% 40% 7% 3% 23% 27% 30% 20% 10% 34% 29% 27% 0% 2015 2020 2030 Expediency of constructing ng gas pipelines in China from Siberia Газ из плотных коллекторов Gas from tight collectors Метан угольных пластов Methane from coal beds Сланцевый газ Shale gas Газ из традиционных источников Gas from traditional sources Cost of shale gas production in China: 200 250 $/thous. m 3
Thus: 1. USA: sharp growth of shale gas production from 11 (2000) to 252 billion m 3 (2012); Substitution of coal part for gas and increase of its export volumes in EU-countries; Stoppage of condensed natural gas (CNG) import with gradual transfer to its export. Development of «shale revolution» in USA can weaken the positions of Russia in competitive struggle at the gas markets of Europe and Asian-Pacific Region (APR). 2. Europe (without RF): 60% of technically extracted shale gas reserves: Poland and France; Development of production can be restrained by rigid ecological legislation, high population density, the higher costs for deposits development. 3. China: Considerable attention to the problems of shale gas production; Two largest basins with the total geological resources 143 trillion m 3 (20% of the world resources). The possible success of «shale revolution» in China can threaten to the expedience of constructing gas pipelines from Siberia in China and change substantially the modern structure of gas markets in southeast Asia (SEA). Cost of gas at well head, $/thous. m 3 Europe China USA JSC «Gasprom» (traditional gas) 250-300 200-250 120-170 20-30
Balance of production and consumption of main kinds of primary fuel and energy resources (FER) for the world regions, mln. toe. 2015 2020 2025 2030 North America Oil -170-70 -20 10 Natural gas -20 30 70 70 Coal 30 50 50 70 Europe and Euroaisa (without CIS) Oil -50-40 -40-10 Natural gas -80-100 -80-60 Coal -20-20 -10 20 APR Oil -1030-1200 -1390-1540 Natural gas -170-190 -240-290 Coal 70-20 -90-80
Average annual market costs of oil and natural gas upon the average for European countries from 1990 to 2012 Cost of oil Cost of gas Prices $/barrel Year $/t $/toe $/1000 nm 3 $/toe 1990 24 168 120 101 88 1.36 1995 19 133 95 105 91 1.04 2000 31 217 155 116 101 1.53 2005 57 399 285 225 197 1.45 2010 92 644 460 272 237 1.94 2011 109 763 545 390 339 1.61 2012 111 777 555 401 349 1.59 ratio(oil/gas) * It is accepted: 1 barrel - 159 littre, average e oil density 0.9 t/m 3, 1 t of oil 1.4 toe, 1 thous. nm 3 of gas 1.15 toe 600 $/т $ у.т. / toe from 1993 to 2002 the average cost of oil and gas in Europe 22 $/barrel and 100 $/thous. m 3 from 2003 to 2012 correspondingly - 74 $/barrel and 283 $/thous. m 3 ; Average ratio of costs(oil/gas) 1993-2002 1.26 2003-2012 1.50 500 400 300 200 100 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 9 2010 2011 2012
2013 2020 Speculative oil costs A certain reduction in the period from 2013 to 2020 Up to 2002 1.26 After 2002 1.50 Growth of demands for oil products in the developing countries; islamizing of Middle East countries; reserves quality deterioration 70-75 $/barrel 350-370 $/toe retardation of reduction in the rates Smoothing of oil and gas costs ratio 1.50 270-290 $/thous. m 3 230-250 $/toe 2012 400 $/thous. m 3
Reduction of cost Occurance and fast development of new (more efficient) technologies for extraction of hydrocarbon reserves difficult of access; Production of shale gas and shale oil in the different countries; Increasing share of transport working with alternative types of energy resources (electricity, CNG, LNG, hydrogen); Growth of a share of nontraditional fuel and energy resources; Some growth of a coal share in the overall balance of energy resources, first of all for European countries;... Main factors Increase of cost 2021 2030 Evident growth of demands for oil products in China, India and in a majority of developing countries; Reduction of a share of extracted, easily accessible oil; Aggravation of islamic factor in oil-producing countries;... 85-90 $/barrel 420-450 $/toe Growth of installed capacities of combined cycle plants; Increase of gas share for transport oil/gas 1.4 2013-2020 1.5 340-370 $/thous. m 3 300-320 $/toe
Possible dynamics of costs for oil and gas (upon the average for European countries ) Average cost of oil Average cost of gas Ratio of Years costs $/bur- (oil/gas) rel $/toe $/1000 m 3 $/toe 1993-2002 22 110 100 87 1.26 2003-2012, incl. 74 370 283 246 1.50 2010 92 460 272 237 1.94 2011 109 545 390 339 1.61 2012 111 555 401 349 1.59 2013-2020 - forecast 70-75 350-370 260-280 230-250 1.5 2021-2030 - forecast 85-90 420-450 340-370 300-320 1.4 Reduction of costs for gas in European countries: possible difficulties with developing the resources in West-Arctic zone of Russia, difficulties with securing the energy safety of the country. Main reasons: Reduction of investment abilities during realization of large-scale projects for development of pointed gas reserves (complex native-and-climatic conditions, remoteness from the existing gas-transport network) ; Increasing economic risk in assimilation of new regions of gas-extraction in the period up to 2030. The actual gas production cost for gas fields in there areas in European countries could be approximately equal to the expected market price or even higher than market price in the same counties. Under such condition the sense of pointed reserves development could be lost from the viewpoint of Russian gas export.
Актуальность проблемы Мировые запасы жидких углеводородных энергоносителей Мировые запасы синтетической нефти (сланцевого масла), которая может быть получена из горючих сланцев методами термической переработки, составляют около 650 млрд.тонн, что в 2,5 раза превышает запасы традиционной и сланцевой нефти вместе взятых. В мире 933 млрд. тонн Сланцевая нефть /EIA, 2013/ 47,1 5% Сланцевое масло /WEC, 2013/ 652,8 70% Натуральная нефть /BP, 2013/ 233,5 25% Источники: BP (British Petroleum), EIA (Energy Information Administration), WEC (World Energy Council), МПР (Министерство природных ресурсов России) 13
Thank you very much for your attention