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Alt Text

Is China Heading Toward An Energy-Debt Crisis?

China’s influence is often overlooked…

How Many "Bakkens" Will Be Found?

How Many

North Dakota's Bakken shale oil deposits were supposed to have only 4.3 billion barrels of proven reserves. But that number keeps rising -- as do the production numbers from Bakken fields.

An initial study by the US Geological Survey (notorious for its miserable record in grossly underestimating oil and gas reserves over decades) claimed that the North Dakota Bakken had 4.3 billion barrels of recoverable oil. The latest official estimate is already 11 billion barrels. Continental Resources (CLR), a leading Bakken producer, says that at current economics and with current technology the North Dakota Bakken has 24 billion barrels of recoverable oil.

The US Government claims that total US crude reserves at the end of 2009 were only 21 billion barrels.

There are almost 170 billion barrels of oil in place in North Dakota according to industry estimates, so that as new generations of technology appear and business experience accumulates, the ultimate recoverable reserves may be scores of billions of barrels.

...Drilling now is at an all time high. The State of North Dakota projects that by 2017 North Dakota’s oil production will have risen to around 600, 000 barrels per day ((bpd)) from about 325,000 bpd at present, compared with only 450,000 bpd in onshore Alaska (according to the US Government) in 2017 and about 525,000 bpd onshore Alaska at present. _SeekingAlpha

But the same technologies that made the North American shale oil and shale gas revolutions possible, are also making it possible for dozens of other countries to repeat the energy revolution inside their own borders.

Australian-Canadian Oil Royalties Ltd reports that it may have discovered a formation similar to the Bakken in the Georgina Basin (Northern territory and Queensland). The company will participate in 2 multi stage horizontal frac wells via Baraka Petroleum.

The latter company recently released estimates of shale oil in place in 2 permits in the Southern Georgina basin of 5 to11 billion barrels.

Another company in the Southern Georgina basin, Central Petroleum, announced significant shale oil in place resources in its permit areas. Like the tremendously productive Williston Basin (home of the Bakken) the Georgina is an intracratonic basin( found in continental interiors, well away from tectonic plate boundaries). Such basins occur worldwide.

The Arthur Creek shale formation in the Southern Georgina is very similar to the Bakken but with about 5 times the thickness. All 18 exploratory wells drilled so far have shown oil.

Australian geologists certainly seem to think they have found another Bakken. In another 15 to 18 months we will know if this is indeed true.

Even France?

It is not Australia, however, but France-- where the greatest industry anticipation and activity is building in the search for the next Bakken; in the well known Paris basin.

The Paris basin (current production of less than 15,000 bpd of conventional oil) covers the northern half of France and extends into neighboring countries. It is a vintage oil and gas basin. Over 2 thousand wells have been drilled and 52 fields discovered. It has extensive oil and gas shale deposits. The 3 oil shale formations are the Lower Lias , Amaltheus and Schistes Carton. The current focus of excitement is the Lower Lias with estimated oil in place resource base of a few billion to tens of billions of barrels. The estimates (guesses) for the oil in place in the other 2 formations are much higher.

Vermillion Energy is one of 10 companies positioning themselves in the Lower Lias. Vermillion reactivated a 25 year old ExxonMobil (XOM) well using drilling techniques tried and refined in the US shale industry. Vermillion is the largest conventional oil producer (8,500 bpd) in France. Vermillion plans to spend $160 million to develop shale oil reserves in the Paris Basin.

Realm Energy International (RLMXF.PK) (it has a shale oil and gas development partnership with Halliburton (HAL)) has also applied to be a significant explorer in the Paris Basin. The company has identified 17 potential oil and gas shale plays in Europe. It is already active in Poland. The company has also been awarded shale concessions in Lower Saxony, Germany.

Torreador Resources, an E&P headquartered in Paris, has perhaps the most ambitious plans for the Paris Basin in partnership with Hess (HES) which has invested $120 million (the figure could be $265 million with contingent payments) with Torreador to explore 1.7 millon gross acres in the Paris Basin. Hess has invested $1billion in the Bakken and plans to invest another $1billion there over the next 5 years. In addition to the Paris Basin, Hess thinks it has found a basin analogous to the Bakken in China.

Torreador asserts that an estimated 100 billion barrels of oil have been generated from source rocks in the Paris basin, of which 30 billion are in the Lower Lias. Its gross acreage position makes it, at present, the largest player there.

Torreador plans to drill 6 wells in the Paris Basin in 2011. Of these 2 each will be vertical, vertical / horizontal combination and horizontal. The first 4 wells have been permitted and a drilling contractor secured. The first well will be completed in February 2011 and the 6th in October 2011. By the end of this year the company expects to complete well evaluation and design phase2 of its program. _SeekingAlpha

And then there are potentially huge shale gas discoveries in Argentina, Quebec, Poland, India, the UK, off the coast of Israel, in China, British Columbia, and on and on . . .

Many of these shale gas finds will also produce large amounts of liquids along with the gas. The discovery phase for this type of field has just begun.

Supplies of natural gas could last more than 250 years if Asian and European economies follow the U.S. unconventional reserves, the IEA said. _UPI

Reserves of coal, kerogens, bitumens, methane clathrates, and other hydrocarbons are almost certainly just as underestimated as reserves of shale oil and shale gas have been. As improved technologies for both discovery and production are developed, the difficulty of obtaining "difficult hydrocarbons" will be reduced.

Remember: EROEI is not a fixed number. It is a moving target, and relatively meaningless on its own. We are barely beginning to put together the puzzle which will reveal tomorrow's energy resources and supplies.

By. Al Fin

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Leave a comment
  • Anonymous on January 21 2011 said:
    While 170 billion barrels is nothing to sneeze at, doesn't it extend the world's oil supplies by 5.6 years at current consumption rates?
  • Anonymous on January 21 2011 said:
    In my experience, the USGS is as often accused of overestimating resources as it is of underestimating. I have not seen analyses that are fully available for public scrutiny and as technically sophisticated as those of the USGS. Calling their record miserable appears to be just another part of the hype surrounding the admittedly exciting developments brought to old plays like the Bakken by development of horizontal drilling and hydraulic fracturing technology.
  • Anonymous on January 21 2011 said:
    That is one way to look at it, and we must also remember that the 170 billion barrels currently thought to be in Bakken is oil in place -- not necessarily economically recoverable proved reserves at this time.Another way to look at it is: Bakken proved and unproved reserves are increasing. But a few years ago that oil was unobtainable. And so on . . .Just as a few years ago the shale gas bonanza in N. America wasn't comprehended. Now the stuff is popping up all over the world. 250 years worth? We'll see.
  • Nick Grealy on January 19 2012 said:
    Realm Energy was taken over by San Leon Energy in early November, which took over the Polish licenses and the applications for French ones.

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