IEA: Shale Oil Not Here to Stay
US shale may be the darling of the oil industry now, but the boom is not going to last, according to the International Energy Agency.
The richest areas will have been exploited by the mid-2020s, meaning the average well drilled in 2025 will be less productive than today, the agency said in its annual World Energy Outlook, Bloomberg reported.
The US will still be pumping large quantities of crude from shale rock -- also known as tight oil -- but output will taper off because a larger number of wells are needed to be completed to maintain or increase production.
OPEC dominates near-term supply growth, with the US accounting for nearly 75% of the increase in global output to 2025.
But this stalls as American tight oil hits a plateau, then falls by about 1.5 million bpd in the 2030s. The recent dearth in new approvals of conventional projects hampers growth elsewhere.
"After 2025, members of OPEC are central to meeting oil demand growth," the report said.
Outside the US, the IEA sees tight oil growth ramping up, notably in Argentina, Russia, Canada and Mexico.
"There is more than 3.5 million bpd of tight oil production from areas outside the US in 2040," according to the report.
source: Financial Tribune
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