One expert thinks the Russians will develop their fracking capabilities sooner than later. File Image / Pixabay
The widely reported drop in Libyan oil production due to civil unrest has been a minor boon for the Organization of the Petroleum Exporting Countries (OPEC) in its struggle to lower output and bring about a global rebalance: the cartel's production in August fell by 170,000 barrels per day (bpd) from a 2017 high, according to a Reuters survey.
But once again, good news regarding OPEC was quickly overshadowed by bad, this time in the form of more predictions that the impending development of Russia's massive shale reserves will spell the end of the organization.
Kenneth Rapoza, business and investment specialist journalist, wrote in Forbes that with the world's second largest shale deposits, Russia "will learn to develop them sooner than later; then, it's curtains for OPEC" and "their ability to manage oil prices will be over.
Kenneth Rapoza, business and investment journalist
Russia and the United States will set the tone
"Russia and the United States will set the tone."
Rapoza reiterated earlier news stories that Gazprom Neft set a Russian record last summer by completing 30 hydraulic fractures along the length of one well in Siberia, and he added that the Bazhenov formation, which is estimated to be the single largest deposit of shale oil and gas in the world (estimates for light crude range from 600 million to 174 billion tons), "is located in areas with developed oil producing infrastructure, [and] Its development is being discussed in scientific, economic, energy industry and political circles from London to Washington."
Rapoza is confident the Russians will advance their fracking capabilities despite current U.S. sanctions against the nation, and he states that development of the Bazhenov will "kill oil prices and impact new markets for liquefied natural gas and liquefied petroleum gas, a market the U.S. now dominates."
Although he didn't mention it, Rapoza's confidence in the former Soviet Union is presumably supported by recent reports that technology for thermo-chemical gas fracturing has been developed that could increase oil production by between 1.7 and 6 times.
University of Tyumen professors said improved well productivity with this process last between 300 and 1,000 days, and that some scientists have seen tests with production increases of 10 to 20 times.
The first testing of the technology at operational wells will begin in September at one of Rosneft's subsidiaries.