WASHINGTON — The United States’ monopoly on pulling oil and gas out of ultra-dense rock formations is ending, as companies aim to replicate the success in other countries, energy analysts said Tuesday.
For several years, the United States has been a laboratory for figuring out how to exploit unconventional tight oil resources on a large scale, but “this is not just a U.S. play,” said Jamie Webster, senior director of the IHS energy research group. By the end of the decade, 10 percent of the world’s tight oil production will come from outside North America, Webster predicted at an Energy Information Administration summit.
American companies are increasingly looking to take the tight oil development techniques pioneered in the United States to other nations, just as foreigners have purchased North American assets to learn the tricks of the trade.
Related story: Chinese coal company to learn shale in US deal
In some cases, companies will be taking unconventional techniques to old fields in countries that are seeing oil production decline, offering new hope of sustaining the life of those projects, Webster said.
Houston-based oilfield services company Halliburton just partnered with a Chinese oil company to deploy hydraulic fracturing in the northwest part of that country. Schlumberger announced a similar partnership last year.
The move to employ hydraulic fracturing and horizontal drilling abroad — in the United Kingdom, Australia, China and other nations — opens opportunities for the service sector to build the pipelines and other infrastructure that will be needed to support the activity and move oil and gas to market.
But there are some big obstacles to duplicating the U.S. success in other countries — including political risks above ground as well as the challenge of determining the best plays underground. Oil prices also have to be high enough not only to sustain the activity once it has started but also to cover the initial risks in frontier areas, Webster said.
“It’s going to be similar to the United States,” Webster said. “You’re going to need this high price to come in” to other countries.