Increased Demand of Crude Oil to Drive Oil Shale Market
Inflationary crude oil prices, as well as the cost advantages of exploiting shale oil over conventional energy resources, are important factors driving demand for oil shale. Global oil shale market is also driven by increased car sales due to rising income levels, and fast urbanisation. With rising petrochemical product demand, rise in crude oil demand is inevitable. According to the Oil report 2020 published by IEA, the global crude oil demand is estimated to reach 104.1mb/d in 2026 from 4.4 mb/d in 2019. With such a rapid increase in the demand for crude oil, the oil shale market is also expected to grow correspondingly.
Rising global energy demand has driven governments to use modern technologies to seek unexplored oil and gas resources in the upstream sector, to increase the supply of crude oil. With falling production of many traditional oilfields, oil and gas companies are boosting their investments in mature oil and gas areas. According to reports, there is currently 65,000 oil and gas field active globally, generating a total revenue of USD 2.1 trillion. The rapid use of unconventional oil and gas fields will therefore boost the supply of crude oil, thus driving the growth of the oil shale market.
Shale oil production is different from traditional production in two keyways. Multiple wells can be drilled from one platform. It appears that shale oil production responds differently to changes in oil prices compared with traditional wells. Technological advances that allow oil producers to extract crude oil from shale rock formations have reshaped the landscape of U.S. oil production over the last 10 years. Since 2008, shale oil production has increased from around 450,000 barrels per day (bpd) to over 5 million bpd and now accounts for more than half of total U.S. crude oil production. This increase in production is unmatched on a global scale: In 2017, the U.S. became the largest oil-producing country with an average of 14.6 million barrels per day of crude oil, petroleum, and biofuels, 2 million barrels per day more than Saudi Arabia.
Increase Dependency on Fuel to Drive Market Growth
The fuel category is projected to dominate the global oil shale market and is expected to remain the fastest-growing segment during the forecast period. This is attributable to the greater reliance on fossil resources. Rising population, increased automotive ownership, and easy access to gasoline are some of the primary reasons driving the fuel segment. Additionally, the rising demand for electricity in various power plants is likely to contribute to the total fuel segment's growth in the future years. Growing economic development, particularly in underdeveloped regions of the world, may boost the global fuel segment in the coming years.
Presence of Large Shale Oil Reservoirs in North America to Drive Market Growth
North America dominated the global oil shale market during the forecast period and is expected to remain the fastest-growing segment throughout. Factors such as the use of shale gas for electricity generation, which is a cleaner fuel than coal, are projected to drive the North American shale market. Some considerations include huge proven reserves, novel applications of hydraulic fracturing technology, horizontal drilling, and the development of new oil shale sources that are estimated to drive the regional market. Massive shale reserves and development in nations such as Canada, and Mexico are projected to generate a market opportunity for the North American shale sector.
The United States of America has large oil shale reserves, as a result, the market in North America is likely to increase rapidly. According to reports, the production of shale gas and tight oil in the United States is expected to expand to about 34 trillion cubic feet by 2050, up from 24.91 trillion cubic feet in 2021. As a result of the foregoing, the United States is likely to dominate the North American shale market throughout the projection period.
Asia-Pacific is the projected region for growth in the oil shale market because of the region's expanding expansion of the oil and energy industries, as well as the developing preference for oil shale as a substitute component in conventional fuels. Factors such as increased oil consumption and rising expansion in oil-dependent industries are projected to drive the market. According to studies, in 2020, China is the Asia-Pacific region's top oil consumer, consuming 14,225 thousand barrels of oil per day. In the same year, India consumed around 4,669 barrels of oil per day, making it the region's second-largest user of oil. With such a larger consumer of oil in the region, the demand for the oil will drive the oil shale market in the coming years.
Global Oil Shale Market: Competitive Landscape
In May 2022, BP (BP.L) intends to treble crude output from its Thunder Horse project in the United States Gulf of Mexico by the end of the year and to launch its latest production platform. BP expects its Thunder Horse project to produce approximately 200,000 barrels per day of oil equivalent by the end of the year, up from the present 100,000 bpd. For instance, in 2020, North Dakota agreed to redirect USD 221 million in federal coronavirus assistance to various state agencies, including a USD 16 million awards to oil corporations to help with the fracking process. The funds come from the Coronavirus Relief Fund established by the federal CARES Act, which was awarded to the state for USD 1.25 billion. This initiative is intended to benefit both the region's shale oil and gas firms.
Few of the players in the oil shale market include American Shale Oil, General Synfuels International, Oil Shale Exploration Company, Central Pacific Minerals, BP, Harbin Coal Chemical Company, Japan Oil, Baraka Energy & Resources, Ambre energy, Gas & Metals National Corp (JOGMEC), Chevron Shale Oil Company, Oil India Limited (OIL), Independent Energy Partners (IEP), Queensland Shale Oil Limited, Israel Chemicals Ltd, Royal Dutch Shell, and others.
Global Oil Shale Market is Segmented as Below:
Key Elements Included In The Study: Global Oil Shale Market
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