US tight oil: Is technology key to a new era?

Using our integrated upstream analysis, we research the possible implications of evolving technology and techniques from 2020

The rapid development of US tight oil continues to impress the industry but with technology and techniques not yet fully mature, the potential for further production upside is significant.

For whilst operators continue their exploration efforts to discover new plays, they are also focused on realising value from existing acreage.

Enhanced oil recovery (EOR) technologies are still in the early test phase in the Eagle Ford, Bakken and Permian but our research suggests a potential 100% increase in recovery rates, adding between 1.5 and 3.0 million b/d to US tight oil volumes by 2030.

Potential upside to US tight oil production chart

If these volumes do materialise and the US maintains its crude oil export ban, we forecast a potential widening of the Brent-WTI differential to ~$30/bbl.

 Discount of LLS to Brent chart

However, such a widening of the Brent-WTI differential could be the catalyst for the US government lifting the crude oil export ban.

Removing the restrictions would shift Louisiana Light Sweet (LLS) back to Brent parity and increase capital flow into the US due to the attractive investment climate.

A surge of US crude oil exports over time would have implications for Brent although our global oil supply and demand balance illustrates that it could be accommodated as we expect the impact to be felt after 2020 and towards 2030.

Read more
US tight oil and technology – a possible upside risk and price implications [Subscription required]

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