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Changes New Oil Resources Will Bring About

Changes New Oil Resources Will Bring About

CHO Yong-Kwon, BAHNG Tae-Seop, PARK Hwan-Il, KIM Hwa-Nyeon
JUNG Yu-Kyung

July 2, 2013

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Governments around the world and leading global companies are turning to developing unconventional oil, following the lead of the US energy revolution. Of particular interest is tight oil, which is found in nearly 140 places in the world. Russia, Canada, Mexico, Colombia, Argentina, China and Australia have joined the US in focusing on tight oil exploration. In addition, oil sands and extra-heavy oil are being targeted in Canada and Venezuela, which have more than 90% of the aggregate.

Both international and state-owned oil companies are involved. For example, Exxon Mobil signed an oil deal with Russian state-owned oil firm Rosneft for tight oil exploration in Russia. In Japan, Sumitomo, Mitsubishi, Mitsui, Itochu and Marubeni are participating in tight oil development projects. China's state-owned Sinopec is investing in Canada's oil sands and PetroChina is exploring for heavy oil in Venezuela.

By 2030, global unconventional oil production is forecast to rise to 9.6 million barrels per day and account for 10.4% of all oil production, up from 3.2 million barrels per day and a 3.8% share in 2011. This will mean non-OPEC countries' oil production growth will increase despite a decline in conventional oil production. Among unconventional oil, tight oil will account for the largest production share up to 2030.

If the non-OPEC countries come close to duplicating the US experience, they will have profound changes in their energy needs. US production of tight oil has been growing at an annual average growth of 39% since 2008, steadily shrinking the need to import oil. In December 2012, the US position as No. 1 oil importer was taken over by China. By 2020, the US is projected to become the largest global oil producer overtaking Saudi Arabia -- producing 11 million barrels of oil per day -- and will become a net oil exporter around 2030.

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