A new report from PricewaterhouseCoopers (PwC) forecasts that increasing oil production from shale and other unconventional sources will have a immense impact on global markets for decades to come, affecting stakeholders across numerous sectors.
The report – "Shale oil: the next energy revolution" – suggested that if the success experienced by U.S. oil and gas companies could be replicated in other countries, "it would revolutionize global energy markets, providing greater long-term energy security at lower cost for many countries."
PwC's analysts cited estimates developed by the U.S. Energy Information Administration (EIA), which show that the amount of oil considered to be technically recoverable has increased rapidly in recent years. As we've discussed, this trend has been driven by advances in both drilling methods and oilfield equipment.
Additional innovation will be necessary to globalize the benefits of breakthroughs pioneered by U.S. companies, as there are numerous factors that could hinder or delay the "revolution" described in the PwC report.
For instance, oil and gas producers looking at shale formations in Europe have found the geological challenges that exist there to be much greater than those seen in the United States. Furthermore, public opinion remains sharply divided on the drilling and fracturing methods that are used to extract oil from tight plays.
Nonetheless, PwC's analysts predict that shale oil could account for as much as 12 percent of global crude production by 2035.
"There are significant strategic implications along the value chain," wrote the study's authors, who contend that the price of oil could be forced down by rising production levels.
In that scenario, companies would need to focus on the efficiency of their operations to ensure that they remain profitable. Implementing a jet pump or other hydraulic lift equipment is one strategy for achieving maximum output from oil and gas wells.