Opec unlikely to pump over 30m bpd soon
Vienna, November 8, 2011
The Organization of the Petroleum Exporting Countries (Opec) is unlikely to produce more than its current output of around 30 million barrels per day (bpd) within the next few months, its secretary general said on Tuesday.
Opec meets on December 14 to set output policy and, with oil prices well above $100 a barrel, some Opec officials have indicated the group will not rush to adjust supplies.
'If the market really needs more crude we are ready to supply but I don't think that Opec will produce more than 30 million barrels a day by the end of this year and maybe also next year,' Opec's Abdullah al-Badri told journalists at the presentation of the organisation's '2011 World Oil Outlook'.
Brent crude oil was up $1.30 to $115.86 a barrel by 1602 GMT on Tuesday. Badri said he did not expect oil prices to fall below $100 in 2011.
'We leave it to the market to decide but to be more specific I don't think the price will come down below $100 by the end of this year,' he said.
Opec on Tuesday raised its medium-term oil demand forecast and signaled that it assumes higher oil prices in light of recent social spending efforts unveiled by some of its key producers.
The global output of non-conventional oil would rise to 3.4 million bpd by 2015, still dominated by oil sands, to 5.8 million bpd by 2025 and to 8.4 million bpd by 2035 when tight oil would be playing a much bigger role, said the organisation.
In its forecast report, Opec said the world will have to wait at least 10 years before seeing big supplies of tight oil similar to the US shale gas revolution. But reserves of tight oil could eventually rival the conventional oil reserves of Saudi Arabia, it added.
Global reserves of tight oil could be as high as 300 billion barrels, the oil producer group said in the report, well above current estimates of Saudi Arabia's conventional reserves of around 265 billion barrels.
'Within a decade, it is quite possible that shale oil (tight oil) production could rise at relatively significant levels year-on-year, assuming prices remain well above $60 per barrel, and regions such as Argentina, Australia and Canada do not significantly restrict operations,' the report said.
'Despite widespread shale deposits, it is not yet clear whether the availability of economically viable shale oil is as great as that for shale gas,' Opec said.
'At present, however, shale oil should not be viewed as anything more than a source of marginal additions,' said Opec, which currently produces every third barrel in the world.
Tight oil is a form of light crude oil held in shale deep below the earth's surface that is extracted with hydraulic fracturing, or 'fracking,' using deep horizontal wells.
Production of tight oil is already transforming the energy industry in parts of the U.S. Midwest and is opening up oil provinces elsewhere, including China.
Unconventional oil developments are now dominated by oil sands in the United States and Canada with 2011 global production amounting to 2.3 million barrels per day (bpd) or equal to production of non-Opec member Norway.
Even by 2035, the United States and Canada would continue to dominate the league of unconventional oil producers with 6.6 million bpd and China would also emerge as a major player with output of 1.1 million bpd.
Opec's estimates are based on a recovery rate for tight oil of just 3 per cent. The recovery factor for conventional oil currently stands above 50 per cent.
Greater use of unconventional sources of energy has the potential to redraw the global energy map as developments in technology such as hydraulic fracturing boost the potential resource's outlook.
Like shale gas, tight oil developments will also most likely draw criticism from environmentalists and politicians over concerns about water poisoning and seismic activities as a result of exploration.
Opec said known tight oil resources cover several basins including in the United States (Bakken, Eagle Ford, Niobrara, Utica, Leonard Avalon, Woodford and Monterey), Beetaloo in Australia, Exshaw and Macasty in Canada, Paris in France and Vaca Muerta in Argentina.
'To date, only the Bakken oil shale formation in North Dakota and Eagle Ford in Texas have been exploited for a sufficient period of time to have a clear understanding of actual resources and reserves,' the report said.
'A number of other deposits are being targeted, but given that many are in their infancy, data on the resources in place and the estimated recoverable reserves is generally limited, and beset with uncertainties,' it added.
'Development costs for shale oil appear to be roughly in the $30-$80 per barrel range, excluding taxes and royalties. However, as the industry develops and moves further along the learning curve, costs can be expected to come down, perhaps sharply over the medium-term, before flattening out,' Opec said.-Reuters
More Energy, Oil & Gas Stories
- Dubai drilling company set for London IPO
- Opec output soars on higher Iraq exports
- S Korea to pay Iran $550m under nuke deal
- Qatar LPG exports will stay unchanged till 2018
- $14bn Bahrain energy sector focus for summit
- Iraq now world's fastest-growing oil exporter
- Old IT systems pose risk to oil firms
- Thomson Reuters adds commodity monitoring tool
- Oil below $90 to hit GCC economies
- GlassPoint appoints new Oman director
- Sheffield company opens Dubai hub
- Oman targets big rise in gas output
- Intertek buys UAE firm for $66m
- Qaiwan to tender Baizan refinery EPC contract
- Al Maha wins Oman Air fuel supply deal
- Iran to become top gas importer by 2025
- UAE hydrocarbon projects seen hitting $11bn
- Summit focus on occupational safety
- Aramco names new senior VP
- Siemens gets $253m Qatar power contract
- Taqa-led group's India deal worth $1.6bn
- Taqa-led group to buy India power plants
- Iraq oil exports hit record 2.8m bpd
- Korean refiners eye more Iraq crude
- Dana starts Egypt gas plant upgrade
- Opec oil production hits new high in Feb
- Taqa-led group to buy Indian hydropower plants
- Schneider gets energy management certification
- Morocco moves ahead with $1.7bn wind farms
- Iraq approves power plant investments