Associação Portuguesa de Energia
Lisboa, 27 de Novembro de 2013
“PETRÓLEO e GÁS NÃO-CONVENCIONAIS:
SITUAÇÃO E PERSPECTIVAS”
António Costa Silva
27 Novembro 2013
Presidente da Comissão Executiva
Associação Portuguesa de Energia
Sumário
1. MUDANÇAS ESTRATÉGICAS e ESTRUTURAIS nos
MERCADOS de ENERGIA
2. O QUE É O SHALE GAS, TECNOLOGIA de PRODUÇÃO e
IMPACTOS na MATRIZ ENERGÉTICA
3. GAS CONVENCIONAL e NÃO- CONVENCIONAL e
TENDÊNCIAS de EVOLUÇÃO
27 Novembro 2013
Associação Portuguesa de Energia
António Costa Silva – Presidente da Comissão Executiva
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Associação Portuguesa de Energia
1. MUDANÇAS ESTRATÉGICAS e ESTRUTURAIS
nos MERCADOS de ENERGIA
27 Novembro 2013
Associação Portuguesa de Energia
António Costa Silva – Presidente da Comissão Executiva
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POPULATION
7 billion people
GDP
65 trillion US$
2030
2012
WORLD CHALLENGES
POPULATION
8,5 billion people
GDP
130 trillion US
CAR FLEET
CAR FLEET
800 million cars
3 billion cars
OIL USE in DEVELOPED WORLD
OIL USE
14 barrels/person/year
OIL USE in DEVELOPING WORLD
Billions of people with better incomes
go from 3 barrels/person/year up to 3
or 4 times more
3 barrels/person/year
WORLD ENERGY MATRIX
. Oil Production is 5 times greater than
in 1957
. Renewables have established a more
secure foundation
. Oil/Coal /Natural Gas provide 80% of
supply
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WORLD ENERGY MATRIX
. Dominance of Natural Gas?
. Consolidation of Renewables
. Solution for the transport system:
(electric/biofuels/GTL//fuel-cells)?
ELECTRICITY
ELECTRICITY
1,5 billion people without access
. Wide access and needs
WATER
WATER
700 million people with scarce resources
. How to lift restrictions?
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GLOBALIZATION OF
OIL DEMAND
OIL-SUPPLY CAPACITY
IS GROWING
• 85% of growth from
developing countries
• Combined effects of income
and population growth
OIL PRICE VOLATILITY
• Departure of oil prices from
economic fundamentals
• Oil price 25% above marginal
cost of production
• Improved recovery efficiency
• Role of unconventional oil
• Impact of Gas Shale
Revolution
• Technology improvements
• Expansion of oil output
KEY
FEATURES
of the OIL
and the
GAS
MARKETS
UNPARALLEL
INVESTMENT CYCLE
GEOPOLITICAL EFFECTS
•
•
•
•
Market instability
Perception of “supply” disruptions
The “fear factor”
Long-term oil price above 70
US$/bbl
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DE-CONVENTIONALIZATION
OF OIL SUPPLY
• US Gas Shale Revolution
• Impact on Oil Shale and Tight
Oil
• Build-up of US, Venezuela and
Canadian production capacity
• Brazil and Atlantic Basin PreSalt-discoveries
FINANCIALIZATION
OF OIL
• Commodity but also financial
asset
• New era of oil pricing dynamics
• From 2003 investment growing
1.5 trillion US$ every 3 years
• Investment in 2012 may reach
a new record (600 billion US$)
• Strong build-up of production
capacity
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ENERGY GAME CHANGERS in XXI CENTURY
UNCONVENTIONAL GAS
INSTABILITY in PRODUCING
COUNTRIES and THREATS
to SUPPLY
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INDUSTRY CATASTROPHIC ACCIDENTS
(e.g. OFFSHORE OIL Spills) and PUBLIC
IMAGE
EMERGENCE of PACIFIC BASIN as
TOP ENERGY CONSUMER
Associação Portuguesa de Energia
António Costa Silva – Presidente da Comissão Executiva
FUKUSHIMA NUCLEAR
ACCIDENT
CLIMATE CHANGE and
ENVIRONMENTAL REVOLUTION
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Associação Portuguesa de Energia
2. O QUE É O SHALE GAS, TECNOLOGIA de PRODUÇÃO
e IMPACTOS na MATRIZ ENERGÉTICA
27 Novembro 2013
Associação Portuguesa de Energia
António Costa Silva – Presidente da Comissão Executiva
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• The Revolution of the SHALE
GAS
• The Conceptual Innovation for
Shale Production
• US Learning Curve
– Footprint Concerns
– Induced Seismicity
• Knowledge of Rocks and
Evaluation of the Potential
• Can the US Shale Model be
exported?
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Associação Portuguesa de Energia
António Costa Silva – Presidente da Comissão Executiva
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What is the SHALE GAS?
A world class source rock and a potential
shale gas reservoir – the DevonianMississippian Woodford Shale
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António Costa Silva – Presidente da Comissão Executiva
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Unconventional Gas Definitions
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Associação Portuguesa de Energia
António Costa Silva – Presidente da Comissão Executiva
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“The MAGIC FIVE”
1- SOURCE
Successfull acumulation!
Is it economic ?
2 - MIGRATION
4 - RESERVOIR
3 - TRAP
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Associação Portuguesa de Energia
António Costa Silva – Presidente da Comissão Executiva
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EXPLORATION AND PRODUCTION OF SHALE GAS
●
Expensive and requires specific technologies
●
In USA costs reduced by:
Ø Limited/focused exploration phase
Ø Production focused and pragmatism: - Drill, frac and see if it can be produced
- Drill, as much as you can
●
Gas transport to production wells requires conductive network of open fractures:
Technology/Price
Pyramide
1 000 md
HIGH
QUALITY
TECHNOLOGY
PRICE
100 md
MEDIUM
QUALITY
1 md
TIGHT GAS SANDS
CBM
Gas Shale
LOW QUALITY
Low Btu
Gas Hydrates/other
0.00001 md
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Associação Portuguesa de Energia
António Costa Silva – Presidente da Comissão Executiva
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ASSESSING SHALE GAS POTENTIAL
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Source: Gaffney & Cline, 2013
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PRODUCTION SOLUTION:
HYDRAULIC FRACTURING
• Fracture Technology is responsible for
USA success in gas shales
Ø
Use large amount of
water in a short period
of time to develop a gas well
Ø
Addition of sand or other
material (proppants) to the
fluid to keep induced fractures
open
Ø Most wells are horizontal with
one or more horizontal legs
extending to the target sections
Ø The legs may extend more than
2 Km from the surface location
of the well
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Associação Portuguesa de Energia
António Costa Silva – Presidente da Comissão Executiva
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Fractures & Stresses Regimes
SPE 110562
SPE 144321
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António Costa Silva – Presidente da Comissão Executiva
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Source: DOE, 2011
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Source: DOE, 2011
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Shale Gas Well Performance
SPE 144321
Lewis et al., 2004
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António Costa Silva – Presidente da Comissão Executiva
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US Gas Production Changes
Source: BP Statistical Review of World Energy June 2009
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António Costa Silva – Presidente da Comissão Executiva
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WORLD TOTAL GAS RESERVES
Source: The Economist, 6th August 2011
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António Costa Silva – Presidente da Comissão Executiva
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D
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F
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APPLICATIONS
DECARBONIZATION OF ECONOMY
. Gas is most versatile of fossil fuels
. Used both in power generation and
transportation
. GTL may be competitive solution for
transport in Medium Term
. Gas is the least poluent of fossil
fuels
. May play key role in transition of
energy paradigm
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GAS
DRIVERS
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EFFECTS OF JAPAN NUCLEAR CRISIS
. Decision of some countries to slowdown
nuclear power (Germany, Italy, Japan)
. Opens a more decisive role for Gas
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António Costa Silva – Presidente da Comissão Executiva
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Private Ownership
of the Land
DYNAMICS of US
ENERGY MARKETS
• Fosters dynamism
and individual
initiative
• Avoids burocracy and
complication
• Role of small/medium
size Independent
Companies
US ENERGY LAW
• Promotes
Entrepreneurship
• Design mechanisms
• Incentives
CREATIVITY/
/INNOVATION
SERVICE
COMPANIES
•
•
•
•
• Ability to challenge
existing paradigms
• Invent new concepts
Drilling/Fracturing
Logging/Operations
Very active
Easy access
SUCCESS FACTORS of US
SHALE GAS MODEL.
INFRASTRUCTURE
Can it be exported?
PRODUCTION
SYSTEM
• Availability of
pipelines and
transmission/
distribution system
• Easy access
• Use based on a “pay
tariff”
• No Monopolies
• Active and mature
industry
• Production close to
pipelines and
consumers
• Water needs
GEOLOGY
• Huge basins with vast
resources
• Ability to design
incentives to tap
resources
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ENVIRONMENTAL
REGULATIONS
• Identity
environmental
impacts
• Act through
regulation not
through prohibition
ACCESS to
FINANCING
• Easy
• Simplified
• Supportive
Associação Portuguesa de Energia
António Costa Silva – Presidente da Comissão Executiva
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T
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“The unconventional revolution”
Shale Gas huge reserves
60% to 250% of conventional
Developments in US world’s big
producer
• Implications for Middle East/Europe
• Feasible solution for Middle East
domestic gas needs
GAS PRODUCTION
• 7.3% growth in
2010
GAS CONSUMPTION
• Rapidly increasing
• 7.4% growth in 2010
• The most rapid
increase since 1989
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• Underinvestment
• Major role in Japan crisis due
to its flexibility
WORLD ENERGY MATRIX
• Rapidly increasing
GAS INFRASTRUCTURE
AND STORAGE
• Exponential growth in trade
(+22%) and consumption
•
•
•
•
G
A
S
I
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D
U
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Y
LNG
UNCONVENTIONAL GAS
RESERVES
• Increasing share of gas
• In 2010 gas share 23.8%
• The highest on record
• Oil lost share last 11 years
• Gas: Future of Oil?
GAS TRADE
• 10.1% growth in 2010
• Driven by strong growth in LNG
(22.6%)
• LNG accounts for 30.5% of global
gas trade
• Pipeline shipments grew 5.4% led
by Russia
• Europe and Eurasia account for 2/3
of pipeline gas trade
• Constraints may arise
from current level of
developments
MARKETS AND
PRICES
• Desindexation of gas
from oil prices
(Atlantic basin)
• Is this a permanent
trend?
• Role of spot markets
more significant
• Atlantic basin before
Japan crisis split 5050 (oil and non-oil
indexed prices)
GAS TRANSPORTATION
ROUTES
• Changes in structural
patterns
• LNG flexibility and
versatility
• Overcome difficulties with
“Stranded Gas”
• Main threat from further
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congestion in key routes
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US OIL SHALE: TEXAS HEARTLAND HEADS THE US OIL REVIVAL
Source: FT, 8th July 2013
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António Costa Silva – Presidente da Comissão Executiva
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Source: BP
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António Costa Silva – Presidente da Comissão Executiva
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FOOTPRINT CONCERNS
AIR:
Emissions (CO2 & others…)
Noise and dust (trucks , operations…)
LAND:
Disposals (solid waste…)
Wildlife/Habitat disruption
Surface Footprint
Roads & Traffic
Induced Seismicity
Pipelines
Soil erosion
WATER:
Aquifers quality / contamination
Availability / supply
Sustainable management (flow back…)
Transparency in Operations
Regulatory Response
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Associação Portuguesa de Energia
António Costa Silva – Presidente da Comissão Executiva
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ENVIRONMENT SOUND WAY?
Source: Shale World Gas, Europe 2011
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António Costa Silva – Presidente da Comissão Executiva
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North America Competition
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António Costa Silva – Presidente da Comissão Executiva
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Associação Portuguesa de Energia
3. GAS CONVENCIONAL e NÃO-CONVENCIONAL e
TENDÊNCIAS de EVOLUÇÃO
27 Novembro 2013
Associação Portuguesa de Energia
António Costa Silva – Presidente da Comissão Executiva
28
27 Novembro 2013
Associação Portuguesa de Energia
António Costa Silva – Presidente da Comissão Executiva
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27 Novembro 2013
Associação Portuguesa de Energia
António Costa Silva – Presidente da Comissão Executiva
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27 Novembro 2013
Associação Portuguesa de Energia
António Costa Silva – Presidente da Comissão Executiva
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THE PRICE OF GAS
Source: BP Statistical Review of World Energy, Natural Gas and Geopolitics
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Associação Portuguesa de Energia
António Costa Silva – Presidente da Comissão Executiva
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THE FUTURE OF LNG COST
Source: IHS Cambridge Energy Research Associates
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Associação Portuguesa de Energia
António Costa Silva – Presidente da Comissão Executiva
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The U.S. may be the world’s fastest-developing shale gas industry,
but China is thought have more of the cleaner alternative to coal.
Source: International Business Times, 17 Oct 2013
China's shale gas basins are massive. The orange depicts
prospective basins while the yellow shows proven grounds. The red
lines are pipelines. International Energy Agency
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27 Novembro 2013
Associação Portuguesa de Energia
António Costa Silva – Presidente da Comissão Executiva
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WORLD TOTAL GAS PRODUCTION
Source: The Economist, 6th August 2011
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Associação Portuguesa de Energia
António Costa Silva – Presidente da Comissão Executiva
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GAS VERSATILITY
. Most versatile of
fossil fuels
. Used in power
generation and
transportation
UNCONVENTIONAL GAS
. Rapid booming of gas
demand will require more
unconventional
. Huge reserves
. Competition with LNG
may be “smoother” than
anticipated
GAS GOLDEN AGE
TECHNOLOGY
. Gas may displace
oil as dominant
fuel
. Floating LNG may change
production pattern offshore
projects
. GTL may open gas share in
transportation system
. Increasing use of renewables
may liberate part of gas for
exports.
. Increasing share
of world energy
matrix
WORLD GAS
MARKET
. Going for a global
Convergence?
. Or MultiRegionalization?
LNG
. Totally globalized by
2022/2025
. Finish the syndrome of the
“Stranded Gas”
. Flexibility in transport
responds quickly to shifts
in Demand
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PIPELINE
TRANSPORTATION
. It will play a major
role on interregional
flows
GAS SUPPLY
. Structural shifts in gas supply
availability
. Expansion in Qatar and West Africa
. Growth of unconventional gas
. Success of major projects critical for
the supply of Atlantic/Pacific basins
ENVIRONMENTAL
CONCERNS
. Differentials with
coal will not lead to
coal dominance
. Costs of nondecarbonizing the
economy
. Increasing role of
gas in a transition to
a more “clean”
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paradigm
OBRIGADO
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António Costa Silva – Presidente da Comissão Executiva
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