[Synapsid]

toolpush,

I believe al-Jazeera is the reason the Saudis aren't talking to Qatar, or a good big part of it.

[ROCKMAN]

It sounds like importing Qatar NG by the Saudis the least of the issues on the table. From: http://www.yementimes.com/en/1768/opini ... n-Gulf.htm

Tensions are increasing between Qatar on the one hand, and Saudi Arabia, Bahrain and the United Arab Emirates (UAE) on the other. In the latest dispute, which began on 5 March, the three states recalled their ambassadors from Qatar, demanding that it ends its support for the Muslim Brotherhood, and that it stops interfering in their internal affairs. Qatar shot back that the disagreement had to do with concerns in countries outside the Gulf Cooperation Council (GCC), whose members are Saudi Arabia, Qatar, UAE, Bahrain, Oman and Kuwait. Subsequently, the pressure on Qatar, led by Saudi Arabia, intensified. There have been Saudi threats to seal off Qatar’s only land border, imposing sanctions and closing its airspace to Qatari planes. Saudi Arabia also demanded that Qatar shuts down the Al Jazeera network and two prominent research centers in Doha. These tensions are clearly very serious, and Saudi Prince Saud Al Faisal underlined their gravity by saying that the group of three countries has rejected international mediation, and that the only way to resolve the dispute is for Qatar to amend its policies. This diplomatic crisis comes in the wake of other serious GCC crises that could potentially realign geostrategic alliances in the Persian Gulf and the entire Middle East region.

[toolpush]

Well looks like they aren't going to be importing Qatar gas very soon, so they had better hope their shales are gassy and they find a way around fraccing with expensive drinking water. Rig numbers could also be an issue. The fact that the US has half the worlds drilling rigs allowed them to mass their rigs on the shale areas. In fact Bakken has about equal number of rigs, as does the whole of Saudi. NOV may end up being very happy building and supplying equipment if all these shale plays suddenly requiring development.

[ROCKMAN]

Pusher - And it would be good for folks to realize that any region that has to ramp up it's drilling/frac'ng infrastructure to exploit their shales will have to spend 5X to 8X on that initial infrastructure investment as it would spend of the yearly capex budget. IOW it costs a lot more to build a drill rig and a fleet of frac trucks then it costs to drill and complete a several years worth of wells. Without a truly massive initial investment in infrastructure no country on the planet can duplicate what has happened with the US shales even if they are lucky enough to have comparable reservoirs.

[phaster]

Pusher - And it would be good for folks to realize that any region that has to ramp up it's drilling/frac'ng infrastructure to exploit their shales will have to spend 5X to 8X on that initial infrastructure investment as it would spend of the yearly capex budget. IOW it costs a lot more to build a drill rig and a fleet of frac trucks then it costs to drill and complete a several years worth of wells. Without a truly massive initial investment in infrastructure no country on the planet can duplicate what has happened with the US shales even if they are lucky enough to have comparable reservoirs.

perhaps this this a silly question, but has any model like hubbard's curve been applied to extracting nat gas in shale via fracking? In other words since the US developed nat gas shale fracking is there an estimate when that might peak??

[ROCKMAN]

phaster - Some try to make estates but I've seen no credible effort. Not because this folks aren't smart but it just too complex.

But you have to understand what Hubbert did: he projected the peak production of developed convention oil fields that had been producing for many decades. In that sense it's very easy to predict PNG from existing shale wells: it's today, or tomorrow, or the day afterwards. A NG shale well begins declining as soon as it comes on. So the answer to your question is really a function of how many NG shales wells will be drilled in future and, more important, how quickly they will be drilled and at what production rate they come on at. That combines geologic limits and economic limits. And the geologic limits are a function of economics. Which is why so many "experts" use "technically recoverable reserve" estimates because they don't have a clue as to how much will be worth producing in the future.

Just consider the boom time in the Haynesville Shale play before 2009. While at Devon we had 18 rigs drilling in the play when NG peaked above $12/mcf. And then prices cratered very quickly. When it fell below $6.50/mcf the panic began. When prices fell further they cancelled the contracts on 14 of those 18 rigs and paid $40 million in penalties to do so. So in essence Hubbert's approach has no application to shale NG IMHO. It also has little application to predicting future production from undiscovered or even new discovered plays whether they are conventional or unconventional.

[phaster]

A NG shale well begins declining as soon as it comes on. So the answer to your question is really a function of how many NG shales wells will be drilled in future and, more important, how quickly they will be drilled and at what production rate they come on at. That combines geologic limits and economic limits. And the geologic limits are a function of economics. Which is why so many "experts" use "technically recoverable reserve" estimates because they don't have a clue as to how much will be worth producing in the future.

Just consider the boom time in the Haynesville Shale play before 2009. While at Devon we had 18 rigs drilling in the play when NG peaked above $12/mcf. And then prices cratered very quickly. When it fell below $6.50/mcf the panic began. When prices fell further they cancelled the contracts on 14 of those 18 rigs and paid $40 million in penalties to do so. So in essence Hubbert's approach has no application to shale NG IMHO. It also has little application to predicting future production from undiscovered or even new discovered plays whether they are conventional or unconventional.

thanks for the answer, which kinda confirmed my own guesstimate model that NG shale fracking is best described as a narrow parabolic curve then connected to a long, long, long tail...

Seem to recall that one report I read last year was that china had twice the NG shale reserves than the USA, BUT the shale formations were different AND isolated thus making extraction much more difficult (i.e. not as cost efficient).

I have a gut feeling that while it took mankind about 140 years to reach conventional peak oil (i.e. from about 1870's after drake sank the first oil well, to about 2005 or there a bouts), the peak curve for shale natural gas is going to be vary narrow by comparison 20 to 40 years max because the global population is so much larger and economic growth is dependent upon "inexpensive" energy!

[ROCKMAN]

phaster - Where some get confused is the distinction between the productivity of individual wells vs the productivity of a trend. Everyone understands the high decline rate of a well in a fractured reservoir. But predicting future drilling in a TREND requires detailed geologic mapping that's typically difficult, if not impossible, to create accurately. Thus Shell Oil pissing away several $billion drilling an Eagle Ford Shale lease where their wells averaged 79 bopd INITIALLY...even before the high decline rate kicked in. And then, even if you had the geology figured out, you still can't make a production projection any more accurately then you can make an accurate price projection for oil. Some cornuopians try to piss on the low projections made by some. But those projections were made assuming future low oil prices. The same error some cronies may be making by assuming high future production rates by assuming oil prices staying high indefinitely.

I promise you if you asked me or any other geologist in 2000 if we would have a drilling boom if NG prices were $10+/mcf and oil was floating around $100/bbl the answer would have been a very loud YES! LOL. Did you catch my tale about drilling a 125 bopd horizontal well in the middle of a 64 yo field where the 6 remaining wells are averaging 2 bopd each? I developed the idea when oil was $30/bbl and no one bought the idea. But if you has told me oil would reach current price levels I would expect to be drilling...which is exactly what I'm doing. I'll be spudding my third well in a couple of months. And if oil prices fall sharply? I'll stick the folder back in my file cabinet and wait...again.