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A great example is the Bakken oil play in North Dakota, which is forecast to produce one million barrels per day by the end of the decade, up from the current level of 500,000 barrels and the mere 60,000 just five years ago. Plays such as this have resulted in total U.S. oil production setting new highs while domestic demand is still at 2008 recessionary levels. Consequently, refined products last year were the largest component of U.S. exports, which hasn’t happened since the 1940s.
Similar developments are happening all over the globe. A story this month in Forbes highlighted a massive oil field in Western Siberia called Bazhenov, which is estimated to cover 2.3 million square kilometers — the size of Texas and the Gulf of Mexico combined. This field would be 80 times the size of the Bakken play, the article states.
But as great as the Bakken is, I learned last week about another oil shale play that dwarfs it. It’s called The Bazhenov. It’s in Western Siberia, in Russia. And while the Bakken is big, the Bazhenov — according to a report last week by Sanford Bernstein’s lead international oil analyst Oswald Clint — “covers 2.3 million square kilometers or 570 million acres, which is the size of Texas and the Gulf of Mexico combined.” This is 80 times bigger than the Bakken.
In addition, new oil drilling and fracking technologies are very expensive. The research we’ve read shows the cost of developing many of these unconventional oil plays requires a break-even price ranging from US$60 to US$130 per barrel, depending on the play type, which happens to be quite similar to the breakeven price for many Canadian oil sands projects