The United States will be the biggest contributor to global oil production growth in the period to 2040, accounting for 75 percent of the total, the International Energy Agency said in its latest World Energy Outlook, adding, however, that this would require a lot more investments than what is currently being made in production expansion.
"Without such a pick-up in investment, US shale production, which has already been expanding at record pace, would have to add more than 10 million barrels a day from today to 2025, the equivalent of adding another Russia to global supply in seven years - which would be an historically unprecedented feat," the report said. The production expansion itself will be motivated by growth in consumption, driven by petrochemicals and fuel demand from the trucking and aviation industries, the IEA said.
The new investments, the authority explained, would have to go into new conventional production. In fact, approvals of conventional field development need to double if the United States is to boost its production as much as the IEA forecasts it could.
The authority also acknowledged the dramatic effect that the shale revolution has had and continues to have on the global oil industry, leading to shifts in policies and strategies from other producers.
"The shale revolution continues to shake up oil and gas supply, enabling the U.S. to pull away from the rest of the field as the world's largest oil and gas producer," it said. "By 2025, nearly every fifth barrel of oil and every fourth cubic meter of gas in the world come from the United States." This means by 2025 U.S. shale oil production should rise more than twofold to 9.2 million bpd.
This rise will be short-lived, as already noted by other forecasts for the oil industry, with production plateauing in the mid-202s and afterwards beginning to decline in the 2030s, the IEA also said in its World Energy Outlook.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More