by tita » Mon 23 Oct 2017, 14:34:40
@Rockman: Right... It's wells that produces oil and gas. But there is no new production if you don't drill new wells. To be correct, I would have to compare new production from wells that started from a date, and discard all legacy production from older wells. Such exercise is quite impossible with data difficult to find. Also, new production doesn't equal to net increase production as legacy wells may be in depletion (which happens fast with shale). My point was to look at the effort (rig count) that takes to increase production, which represent the investment costs. (of course, an offshore rig costs much more than an onshore one)
But you propose a rough idea... so, let's see it:
"in the last 10 years that relatively small number of rig drilling the Marcellus Shale (60 to 120 on a given days) has increased NG production more the all the rest of the rigs in the world during that time period."
Between 2007 and 2016, Marcellus increased its production by 186 billions cubic meter per year (eia). This is huge (almost all of US increase), no other country alone could rival Marcellus... Norway (+26), Iran (+78), Qatar (+118), KSA (+35), Australia (+50), China (+61). (BP statistics... like the rest of my numbers)
Between 2007 and 2016, US gas production increased by 200 billions cubic meter per day. The rest of the world increased anyway the production by 400 billions m³/d. So, your statement is wrong, although Marcellus represent a bit less than a third of global gas production increase. Yes, Marcellus play is truly remarkable for a shale source... due to a much lower depletion rate than Haynesville. (in my research, I realized that the Haynesville, Marcellus and Utica plays represent together 65% of the gas rig count currently, while it was 35% in 2011...)
So... at least for gas, the rest of the world does better with less rigs. What about oil?
Between 2007 and 2016, US oil production increased by 5'500 MMbbls/d (NGL included). The rest of the world increased by 4'315 MMbbls/d.
So, US made better than the rest of the world... Surprising? Not really... As you said, I was not talking about wells from fresh drillings, but also older producing wells. And we know that a lot of them are in depletion. Alone, middle east increased production by 6'500 MMbbls/d. Of course, some is from geopolitical reasons... But anyway, World outside US and middle east depleted by 2.2 MMbbls/d.
Which tell us a rather interesting fact... The rest of the world puts as much effort globally to increase production rates as US does, with about the same results (or even less). This is of course not straightforward. US rig count has always been the same or higher than the rest of the world, without much result before shale developpment. Between 1976 and 2007, US production decreased by 3 MMbbls/d, while the rest of the world increased by 25 MMbbls/d... A trend that changed completely in the last decade.
Shale made sense because of a major change in the oil supply globally, which growth has slowed. The rest is just market behaviour, price increase to fuel one of the only available trend to answer a sustained growth in oil consumption (about 1MMbbls/d increase each year), in the only place in the world where investment in E&P were always high compared to the rest of the world.
IMHO, our ability to follow the consumption trend will require investements similar or greater than what we have seen between 2007 and 2014... Of course, there are a lot of places where it makes sense to drill a well (even for LTO) at current prices... It's just there isn't enough. We have to drill much less profitable places... Which of course become profitable at some level of price. And it's not only for the US, but also globally.