Global Information Inc. would like to present a new market research report, "Unconventional Oil (Oil Shales, Oil Sands and Extra-heavy Oil) - Market Analysis, Industry Developments and Forecasts to 2020" by GlobalData.
Extra-heavy Oil and Oil Sands Represent about 23.5% of Proved Oil Reserves Globally
Most of the worlds extra-heavy oil deposits are located in Venezuela and Canada. Most of the extra-heavy deposits in Venezuela are located in the Orinoco Belt, and those in the Canadian Alberta Province are largely in the form of oil sands. According to the 2012 BP Statistical Review of World Energy, proved reserves in Orinoco Belt (Venezuela) and oil sands (Canada) constituted 23.5% of the worlds total proved oil reserves at the end of 2011. Apart from Venezuela and Canada, extra-heavy deposits are also found in the US, Madagascar, Russia and the Democratic Republic of Congo (BP, 2012).
The figure below compares the proved reserves of the Orinoco Belt (in Venezuela) and the oil sands of Canada with the total global proved oil reserves.
Unconventional Oil Accounts for About 3.1% of Global Oil Production
Unconventional oil accounts for about 3.1% of the current global oil production, which in 2011 was about 32.1 billion barrels (bbl). Production from Canadas oil sands and Venezuelas extra-heavy oil belt were recorded at around 581.9 MMbbl (million barrels) and 206.1 MMbbl, respectively, in 2011. According to the US Energy Information Agency (EIA), shale oil production in the US was estimated to be around 200.8 MMbbl in the same year (EIA,2012).
The figure below presents the contribution of oil sands, extra-heavy oil and shale oil to global oil production in 2011.
In 2011, the production of unconventional oil globally was estimated to be around 988.8 MMbbl. Canadas oil sands production contributed the most to this, accounting for around 58.8%, and was followed by Venezuelas extra-heavy oil, which accounted for around 20.8%, and shale oil, which accounted for around 20.3%.
Unconventional Oil Production is Estimated to Surpass 2,100 MMbbl per Year by 2020
Global production of unconventional oil is estimated to increase to around 1,534 MMbbl per year in 2015 and further to over 2,100 MMbbl per year by 2020. Canadas oil sands are expected to continue dominating global production of unconventional oil during the forecast period.
The figure below presents the estimated production of unconventional oil in 2015 and 2020.
The increase in unconventional oil production is expected to be driven by rapid developments in Canadas oil sands and shale oil production in the US. Oil sands production is estimated to increase from 581.9 MMbbl in 2011 to around 858.8 MMbbl in 2015, and further to 1,157.8 MMbbl in 2020. During this period, shale oil production is estimated to increase from around 200.7 MMbbl in 2011 to around 657 MMbbl in 2020. Extra-heavy oil production in Venezuela is estimated to increase from its current level of around 206.1 MMbbl to around 292 MMbbl in 2020.
Sustained High Crude Oil Prices Encouraging Development of Unconventional Oil Resources
Sustained high crude oil prices have been instrumental in making the development of unconventional oil resources economically viable. Oil prices above a certain threshold are essential for the development of unconventional oil projects as the development costs of unconventional oil projects are generally higher and therefore needs high oil prices to make them economical. Despite this seemingly precarious factor in the industrys development, the price of crude oil is expected to remain over $80 per barrel in the long-term future and thus the development of production from unconventional oil projects remains attractive for oil companies.
Pressure on Foreign Operators to Give PdVSA Compulsory Stake may Discourage them from Investing in Venezuelan Projects
Petroleos de Venezuela S.A. (PdVSA) is the Venezuelan National Oil Company (NOC) and was formed in the 1970s. In the 1990s, the government had initiated the liberalization of its oil and gas sector. However, the government of Hugo Chavez, the president of Venezuela elected in 1999, has since raised royalties and taxes on new and ongoing oil and gas projects and made it compulsory for all foreign companies to give a majority stake in their projects to PdVSA. Additionally, in 2006 the government started the nationalization of oil exploration and production and the stake to PdVSA in all oil projects was made a compulsory minimum of 60%. Many International Oil Companies (IOCs) like Eni S.p.A. and Total saw projects forcefully taken over, and over 16 companies, including Shell, had to bring in amendments in their previous agreements. Such unpredictable and harmful actions from the Venezuelan government may dissuade many more large IOCs from investing in the Venezuelan oil and gas industry as they seek stability and security for large investments.