The Ministry of Natural Resources recently approved the proved reserves of 165.025 billion cubic meters of Red Star shale gas field at Sinopec's Jianghan Oilfield, the formal coming-of-age of another giant shale gas field in my country.
Not only is it good news for China but it also signals a new shale oil and gas era of world development. From Saudi Arabia's Jafurah gas field to Argentina's Vaca Muerta shale formation, from Canada's Montney Formation to Algeria's shale gas projects, a multipolar shale revolution reshaping the world's energy landscape is underway.
In North America, Canada's Montney Formation is currently a secondary production center, ranking behind only the US Permian Basin. The Montney Formation is a shale formation that crosses Alberta and British Columbia. Energy data analytics company Enverus said in an April 2024 report that the Montney Formation is not only one of North America's largest natural gas deposits, holding 443 trillion cubic feet of proved recoverable natural gas reserves, but also contains 11 billion barrels of high-grade crude oil. An estimate from energy investment firm Kimmeridge states that the undrilled resources of Montney Formation can provide at least 50 years of consistent production. Its low-cost profile makes it a "premium asset" among international shale investors.
In South America, Argentina, and its Vaca Muerta shale play, is currently a global leader in shale development. "Vaca Muerta" literally means "dead cow." This Argentine Neuquén Province shale play, the "Pearl of South American Shale" by industry terms, geologically resembles closely the Eagle Ford Shale in the United States.
According to collaborative exploration data from the United States Geological Survey (USGS) and the Argentine Ministry of Energy, the Vaca Muerta Shale contains recoverable reserves of 16 billion barrels of oil and 308 trillion cubic feet of natural gas, the second-largest shale gas reserve in the world and fourth-largest shale oil reserve. Argentine Energy Minister Flavio Rossi stated the government will submit tax incentives and boost infrastructure to attract additional investment from international giants such as Shell and Total. The goal is to increase the Vaca Muerta Shale's production of oil and gas threefold by 2030, thereby boosting "energy export diversification."
North African Algeria sees shale gas development as a prime opportunity to lock up the European market. As an OPEC member, Algeria's shale gas resources which are recoverable stand at 231 trillion cubic feet according to the USGS. In June 2024, Algeria's state oil company Sonatrach was poised to sign a pact with US supermajors ExxonMobil and Chevron to co-invest $8 billion in the exploration and production of southeastern Algeria's Illizi Basin shale gas resources.
In the Middle East, Saudi Arabia has opened a new chapter in unconventional energy production with the discovery of the Jafra field. The Jafra field, located in Saudi Arabia's Eastern Province, is the largest unconventional gas discovery in Saudi Arabia to date. It contains 229 trillion standard cubic feet of natural gas and 75 billion barrels of condensate, as estimated by Saudi Aramco, totaling 30% of Saudi Arabian conventional natural gas reserves.
Saudi Aramco President and CEO Amin Nasser stated that the Jafra field development not only will help Saudi Arabia achieve its goal of increasing domestic natural gas production capacity 60% by 2030 compared to 2021 levels, but will also provide feedstock for the petrochemical industry and power start-up industries such as artificial intelligence data centers, driving Saudi Arabia's transformation away from a crude oil-export-based economy and towards one with diversified sources of energy.
In the long term, the global shale oil and gas boom is a turning point of the global energy trend's transition from the old to the new. It not only helps to ease the current global supply shortage of energy, provides space for countries to change energy policy, but also provides time for the development of renewable energy. However, balancing shale development and environmental protection, coordinating the rhythm of the development of fossil energy and renewable energy, and creating a more equitable and rational international energy governing system remain issues to be addressed by all countries.
In the future, international energy development direction will not be a simple choice between "shale oil and gas replacing traditional energy" or "renewable energy replacing fossil energy" but a comprehensive coordination of multi-energy synergy, high-efficiency use, and low-carbon emission.