OPEC's failure to increase output has raised speculation as to whether worldwide supply can meet future demand. Many believe OPEC won't increase output because it can't, and if that's true, where will future supply come from?
Black gold rush
Royal Dutch Shell is launching development on a sizable discovery in the Gulf. Last year, the company discovered an oil field capable of producing approximately 140 million barrels over its lifetime. Based on current consumption of roughly 20 million barrels a day, the Shell discovery is enough oil to meet U.S. demand for approximately seven days.
Surprisingly, ATP Oil & Gas
All told, the Gulf of Mexico is estimated to hold 45 billion barrels in recoverable reserves. Drilling activity is picking up again after the temporary halt in production in the wake of the BP oil spill. But the hunt for oil doesn't stop in the Gulf.
There are numerous onshore supply sources as well. The Eagle Ford shale in Texas is chief among these. EOG Resources is a big player in the fertile oil field. The company reportedly has 900 million barrels of oil in the region.
Chinese oil giant CNOOC is betting big on the Eagle Ford shale. Late last year, the company paid Chesapeake Energy
All told, some project the Eagle Ford shale holds about 25 billion barrels of oil, making it the most significant recent oil discovery in the United States.
Another significant discovery is the Bakken shale in North Dakota. The United States Geological Survey estimates the recoverable reserves at 24 billion barrels in the region.
Kodiak Oil and Gas
Then there's the highly debated Arctic National Wildlife Refuge. It's hard to predict how much oil the region contains, but the mean estimate of geologists places the figure at 10.4 billion barrels of recoverable reserves.
That's a lot of oil, but the problem is many believe it would take several years and a significant financial commitment before we experience the benefit from exploring the wildlife refuge.
Last year, ConocoPhillips
Below is a table summarizing the potential impact of some highly targeted oil fields based on current U.S. consumption rate of 25 million barrels a day.
Estimated recoverable reserves
Potential U.S. Supply (years)
|Gulf of Mexico||45 billion barrels||6|
|Eagle Ford shale||25 billion barrels||3|
|Bakken shale||24 billion barrels||3|
|ANWR||10 billion barrels||1|
The bottom line
All of these oil fields could partially pick up the slack for OPEC. But keeping up with U.S. as well as soaring worldwide demand will become increasingly difficult.
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