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Will the World resist KSA's shale gas boom?

HONG KONG - Saudi Arabia signaled Monday that it intends to remain a world energy powerhouse for the foreseeable future, partly by exploiting new technology which has unlocked vast quantities of oil and natural gas in North America.

Mr. al-Naimi said, adding that his country "will not stint" in ensuring that its customers' oil needs are met.

"This year alone we are going to test seven wells for shale. We have rough estimates of 600 trillion cubic feet of unconventional shale gas. The potential is very huge and we plan to exploit it," he said during a Credit Suisse conference.

Mr. al-Naimi didn't offer a forecast of how quickly Saudi Arabia might achieve commercial production of shale gas or shale oil, or describe how it will supply the large amounts of water used in hydraulic fracturing, or "fracking," the process used to extract oil and gas from shale.


Saudi Arabia has seen its lead over the U.S. in crude-oil production narrow sharply in the past year, thanks to rising shale-oil output in the U.S., where crude production in November and December topped 7 million barrels a day for the first time in 20 years. Saudi output eased to 9.2 million barrels a day in December, from 9.6 million the previous month.

The U.S. Energy Information Administration recently forecast that U.S. crude output will swell to 7.5 million barrels a day within six months. The International Energy Agency, which represents key oil consumers, has predicted the U.S. will overtake Saudi Arabia as the world's largest oil producer by 2020.

Natural gas output from state giant Saudi Arabian Oil Co., or Aramco, averaged 9.9 billion cubic feet per day in 2011, up from 9.4 billion cubic feet per day in 2010.

Aramco Chief Executive Khalid al-Falih said in December that the company plans to drill seven natural gas exploration wells in deep and shallow water in the Red Sea, off the coast of the northwestern city of Tabuk.

On Monday, Mr. al-Naimi said that prospects for global production of shale gas and oil--including in China, Ukraine, Poland and Saudi Arabia--were so promising that the kingdom might not need to continue with its decades-long policy of maintaining an oil-output cushion for use in case of global supply disruptions.

"It is not a question whether Saudi Arabia has spare [oil] capacity. It is a question of whether we need to spend billions maintaining it at all," Mr. al-Naimi said.

"New commercial reserves such as shale oil are good news for the global economy" and "will ensure even greater stability of markets and prices," he said.

Mr. al-Naimi said that the hopes of "two or three" members of the Organization of Petroleum Exporting Countries that the pricing of crude oil in international trade will shift to a basket of currencies or the euro would not be realized.

"I don't think that is going to fly," he said.

Summer Said in Dubai contributed to this article.


OK, lets look at the article critically -- What are the key or important signals Mr. Naimi has sent, and who are his intended audience - and what is our take away from it -
The way I read it: - A shift towards Gas as opposed to spending billions to maintain spare capacity regarding oil, effects Whom??

Mr. Naimi is signaling that Aramco respects it's market share and is determined to maintain it, even if that means investing more in Gas exploration and delivery infrastructure (there's still money to make investing in Arabia)

And most importantly Mr. Naimi confirms that oil reserves in Arabia will continue to be tied directly to the US Dollar - for those who realize the meaning of Arabian crude in US dollars, this will be welcome.
 
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OK, lets look at the article critically -- What are the key or important signals Mr. Naimi has sent, and who are his intended audience - and what is our take away from it -
The way I read it: - A shift towards Gas as opposed to spending billions to maintain spare capacity regarding oil, effects Whom??

Mr. Naimi is signaling that Aramco respects it's market share and is determined to maintain it, even if that means investing more in Gas exploration and delivery infrastructure (there's still money to make investing in Arabia)

And most importantly Mr. Naimi confirms that oil reserves in Arabia will continue to be tied directly to the US Dollar - for those who realize the meaning of Arabian crude in US dollars, this will be welcome.

Mr. Naimi can shove it :yay:

Now we have the shale sh!t , a pipeline to Pakistan is much needed ...
 
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ISLAMABAD: Pakistan has discovered a new gas reserve in southern Sindh province that would help reduce acute gas shortages for industry and transport, the petroleum ministry said Friday.

New gas reserves discovered in southern Pakistan - thenews.com.pk


We have untapped resources in abundance in Pakistan but unfortunately Pakistan is located in a middle of a Zoo and the government spends most of their money on Military and not on infrastructure or exploration of Resources..
 
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ISLAMABAD: Pakistan has discovered a new gas reserve in southern Sindh province that would help reduce acute gas shortages for industry and transport, the petroleum ministry said Friday.

New gas reserves discovered in southern Pakistan - thenews.com.pk


We have untapped resources in abundance in Pakistan but unfortunately Pakistan is located in a middle of a Zoo and the government spends most of their money on Military and not on infrastructure or exploration of Resources..

Congrats :party:

That's what I mean by Saudi-Pak pipeline :coffee:
 
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"Will the world resist KSA's shale gas boom"

This is an amusing question to ask in the light of the fact that shale gas is not something that is exclusive to Arabia.So yes SA could have one of the largest reserves of shale gas and may produce one of the highest amount of shale gas but all it's customers also have large reserves,some have even greater than SA, of shale gas and could produce ample amount of shale gas on it's own.

So the question is not whether SA would be able to produce enough gas but is whether it would find customers for it's shale gas.

Also add to this the fact that Processing of shale requires large amount of water, something which SA is completely lacking.
 
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ISLAMABAD: Pakistan has discovered a new gas reserve in southern Sindh province that would help reduce acute gas shortages for industry and transport, the petroleum ministry said Friday.

New gas reserves discovered in southern Pakistan - thenews.com.pk

We have untapped resources in abundance in Pakistan but unfortunately Pakistan is located in a middle of a Zoo and the government spends most of their money on Military and not on infrastructure or exploration of Resources..
Shale gas is in a different league altogether. You cannot compare the two. Let's amplify this a bit. How is shale gas extracted?

Like conventional gas, extraction is via a well. But that's where the similarity ends. This is drilled vertically above the shale, after which the drill is steered until it is horizontal and drilling continues. This is because the reservoirs are wider than they are tall, so horizontal drilling accesses more of the reserve.

To allow the gas to flow, fractures have to be created in the rock. This is done by hydraulic fracturing (fracking). Fluid (approximately 99-99.5% water and sand, and 0.5-1% chemicals) is injected down the well and into the shale rocks at high pressure. The sand props open the new fractures allowing the gas to flow into the well and be collected at the surface.


Shale_zpscc719471.jpg


Saudi Arabia's aspiration for a US-style gas bonanza must confront three key scarcities — water, shale gas expertise and pipelines — before it can become a reality. You must remember that the US shale bonanza has been more than three decades in the making! And that's a lot of lead time.

In addition, America has thousands of kilometres of gas pipelines and receiving points, its geological survey records are extensive, its exploration companies have pioneered the key techniques of horizontal drilling and fracking, its rig crews are the best in the business and have good access to water for fracking, and there is a strong service sector covering finance, distribution, processing and marketing to support the industry. Even so, the industry has had to contend with vigorous opposition from environmental and farming groups concerned over water and land usage.

So It's not enough just to have shale deposits. The infrastructure and expertise required for extraction and distribution is mind boggling!

There are risks involved and these have recently been assessed in a report for the European Commission, which assessed the cumulative impact of fracking at several sites as having a high risk of causing local environmental problems including groundwater contamination, surface water contamination, water resource use and air pollution.

The volume of water used for each frack varies depending on the location and the geology. In the US, water used has varied from 9,000 to 29,000 cubic metres (9–29 million litres or between 2 and 6.4 million gallons). Fracking waste water may also contain substances from deep underground such as strontium, benzene, toluene and Naturally Occurring Radioactive Material (NORM) such as Radium 226.

Fracking for shale gas has also been linked to increased levels of air pollution and associated health problems. Air pollution was identified as a ‘high risk’ by the European Commission study mentioned above.

Considering the above, all does not seem well for the shale industry except North America due to reasons brought out above. But what does the world think about shale extraction? Encouraged by developments over the last decade in the US, the shale gas industry is looking to expand across the world, with Europe, South Africa, India and China being prime focal points. In most of these places, the industry is facing stiff opposition. Below is a snapshot of the current state of play in some key countries:

In Western Europe, the parliament in France has passed a law banning fracking, despite the potential for considerable reserves. Public opposition is growing in Spain, with the Cantabria region coming out against fracking. In Germany, the federal government is reported to be concerned, and there is also concern in regions including North-Rhine Westphalia and Thuringia. In Holland, fracking is on hold pending further studies, expected to start this year, and opposition is strong. There is interest in fracking and a growing anti-fracking movement in Ireland and Sweden. In Eastern Europe, Poland is being targeted as a key development area, but initial results have been disappointing. Fracking was banned in Bulgaria in 2012 following widespread protests. Proposals for fracking in Romania have faced widespread protests.

In this context, seeking out new sources of fossil fuels is probably not the right direction for an energy policy. Given the inherent risks for the local environment and human health and major skepticism about its impact on energy prices, fracking for shale gas is a gamble one doesn't need to take.
 
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@Yzd Khalifa
The question I want to ask here is does KSA has enough fresh water to frack all these oil shales.As you might be well aware off Saudi Arabia exceeds the available supply from aquifers, leading to the requirement of 27 desalination facilities which deliver nearly 300 billion gallons of water each year.
 
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@Yzd Khalifa
The question I want to ask here is does KSA has enough fresh water to frack all these oil shales.As you might be well aware off Saudi Arabia exceeds the available supply from aquifers, leading to the requirement of 27 desalination facilities which deliver nearly 300 billion gallons of water each year.

Yes I agree bro. But I believe that KACST has done a great job to KSA when it comes to water desalination. Anyway, Aramco is now drilling seven tests gas well.

"Will the world resist KSA's shale gas boom"

This is an amusing question to ask in the light of the fact that shale gas is not something that is exclusive to Arabia.So yes SA could have one of the largest reserves of shale gas and may produce one of the highest amount of shale gas but all it's customers also have large reserves,some have even greater than SA, of shale gas and could produce ample amount of shale gas on it's own.

So the question is not whether SA would be able to produce enough gas but is whether it would find customers for it's shale gas.

Also add to this the fact that Processing of shale requires large amount of water, something which SA is completely lacking.

Don't worry, Asian countries will slurps the shale sh!t :D
 
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Due to the importance for such news like this, I would like to invite you guys to discuss the subject:-

@Azazel @Mosamania @Jade @applesauce
@OrionHunter @muse @Armstrong @BLACKEAGLE @Aeronaut @T-123456 @Developereo @Luffy 500
@Imran Khan @BATMAN @JUBA @Arabian Legend @Ceylal
:yay: it's a historic moment for KSA

I would say that the Saudis, and everyone else, should use their natural resources ONLY as a means to fund their industrialization, not as the core foundation of their economy.

This is what differentiates developed countries from the "colonies".
 
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I would say that the Saudis, and everyone else, should use their natural resources ONLY as a means to fund their industrialization, not as the core foundation of their economy.

This is what differentiates developed countries from the "colonies".

Which we're doing now :yay:
 
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Yzd, if you value Saudi Arabia and its citizens, there is two things you don't want :
SHALE GAS ...It will ruin your water tables...not talking on the fauna and human existence . I am saying this from personal experiences...WE have made ALGERIANS aware and there is a budding mouvement that is guetting stronger to counter act any DZ government laws to open Algerian soil for its exploitation.
WALMART...it will destroy all the small business...like a Tsunami.
 
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