The shale oil revolution in the USA, its influence on the industry

The shale revolution in the USA is the most topical issue in the world oil market. The balance of demand and supply and, correspondingly, oil prices and other things depend on it.

The shale gas revolution some time ago stirred the world energy market and led to serious changes in the gas market. Natural gas forecasts had to be seriously revised predicting the emergence of the USA as a major natural gas importer. This time we have to analyze consequences of the second shale revolution – an oil one.

The US progress in production of unconventional oil is obvious. However, it is assessed very differently.

There is a stable group of super optimists who state that the industry has entered a new epoch; they claim that shale oil production costs are decreasing at a fantastic pace and prices of $30 to $40 per bbl do not undermine American projects.

They try to attribute a sharp drop in drilling activities in the USA to a technical progress – there is allegedly no necessity in extensive drilling. They believe that a production slump in the USA this summer and autumn is a temporary phenomenon.

Representatives of companies engaged in conventional projects are confident that the above data is false. They form the camp of shale alarmists. For instance, at the end of October 2015 Rosneft head Igor Sechin declared that US shale companies had accumulated $150bn in debts, while tight oil production in the world was profitable only at prices of $85 to $98 per bbl.

So, who is right? How will the second shale revolution in North America influence the Russian oil sector? A new report by the National Energy Security Fund answers these questions.

The report elaborates on the following issues:

• Notion of shale and unconventional oil

• World reserves of unconventional oil: what is the scope of imagination?

• Main deposits of unconventional oil in the USA

  • Reserves
  • Production capacity
  • Evolution of deposit development

• Economy of American shale projects

  • Assessment of production costs
  • Debts
  • Influence of low world prices

• Main players in the North American market

• Technological factor

  • The real development of unconventional oil production technologies

• Forecast of shale oil production in the medium-term perspective

Contents of the report: