Geopolitics of Unconventional Resources Outside North America

Charlez, Philippe A. (Total)


With the shale gas (SG) and Light Tight Oil (LTO) development, the US has become gas independent and has halved oil dependency. This revolution was based on four pillars: knowledge of the subsurface, open and competitive market, full government support and favorable mining law.

Outside the US, SG and LTO development cannot rely on the same pillars. The purpose of this paper is to analyze the motivations and the possible blocking factors that could encourage five countries/regions to develop (or not) their unconventional resources.

Gas exporter until 2004, Argentina imports today gas from Bolivia and LNG from the Middle East in a subsidized local market. These imports could ultimately stifle Argentina's public finances. Consequently, the authorities want to quickly develop the huge potential of the Vaca Muerta, one of the best source rocks in the world. Nevertheless, the cost of imported equipment and products as well as the monetary stability of the local currency could be blocking factors.

Saudi Arabia, the world's second largest oil producer, consumes nearly 1 Mbopd to satisfy the increasing electricity demand. Unlike Iran or Qatar, Saudi Arabia has not sufficiently developed its gas potential. Therefore, it intends to extract its unconventional resources in the future, in particular the source rock of the Ghawar field. Water supply for hydraulic fracturing could be a blocking factor.

China is facing a double challenge: reducing its GHG emissions by displacing its power generation from coal to gas/renewable while keeping its energy dependence at an acceptable level. Therefore, China is looking forward to develop its unconventional potential which is expected to be comparable to that of North America. The resources are located in the Tarim Basin (North West) and the Sichuan Basin (South East). The depth, the complexity of geological structures, the remoteness and the aridity of the basins make the field operations difficult and expensive.

Russia is now 70% dependent on its oil and gas revenues. The potential of Russia's unconventional resources is mainly associated with the gigantic Bazhenov formation located in Western Siberia. The Russian authorities, who wish to offset their declining conventional fields, have launched a legislative process associated with tax incentives. Permafrost and subartic conditions can be blocking factors as drilling and fracturing are required all over the year.

In the last 30 years, competitiveness in Europe was weighed down by an oil and gas bill that represents 75% of its debt. Developing the local resources to avoid becoming 100% dependent on the suppliers is of strategic importance. However, the development costs, the regional urbanization and the societal opposition are potential blocking factors.

  Geologic Time: Phanerozoic > Mesozoic (0.46)
  Industry: Energy > Oil & Gas > Upstream (1.00)