The CEO of Saudi Arabia’s state-owned giant Saudi Aramco said on Monday that his company did not see US shale as a threat, but rather as a stabilizing influence globally on the industry – Platts reported today.
“First of all we have our own tremendous opportunities in shale and gas, … we are transferring that experience in the US in a very accelerated way in the Kingdom,” Khalid Al-Falih told the ONS conference in Stavanger, Norway.
“We will be actually delivering our first increment of shale within a couple of years to a major development in the Kingdom,” he said.
“I also think, globally, shale oil and gas is the best thing that has happened because it has kept prices within a band that allows consumers and producers to plan appropriately for investment and to meet rising energy demand,” he said.
“Without that share, the world would have been in a tight spot given the interruptions that have taken place in some other producing areas,” he said.
Saudi Aramco has recently announced that new hydraulic fracturing technologies are being developed to improve cost efficiency, increase recovery rate and reduce environmental impact and enhance well productivity across shale, deep sandstones and carbonate formations in Saudi Arabia.
The company has already made progress with the development of several technologies, including pulsed gas fracturing, plasma technology, CO2-based fracturing fluids, staged fracturing, and microseismic fracturing.
Apart from shale gas, Saudi Aramco further invests in exploiting tight gas reserves, which is a cheaper means of developing gas resources than shale. The company believes it can develop gas at about $2-$3 a million BTUs from tight gas formations. If successful, then tight gas would offer savings of well over $10 a million BTU compared with shale gas production.
Khalid Al-Falih further dismissed the idea that OPEC would be able to control the oil price going forward, saying: “This is a market driven business. It’s not OPEC, it’s not IEA, it’s not producers nor consumers that should get into the business of trying to control the market,” he said.
“Supply and demand will play the key role. OPEC has played a role, trying to step in … when shortages take place, which is I think something being appreciated globally,” Al-Falih said. “But prices are very much market driven.”
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