09 November 2012, Sweetcrude, VIENNA – THE Organisation of the Petroleum Exporting Countries, OPEC, has admitted that technology for extracting oil and gas from shale has significantly impacted the global supply picture.
OPEC, which is admitting this for the first time, said demand for crude would rise more slowly than it had previously expected.
In its annual report, ‘World Oil Outlook’, OPEC cut its forecast of global oil demand to 2016 due to economic weakness and also increased its forecast of supplies from countries outside the 12-nation exporters’ group, Reuters reported.
The report said: “Given recent significant increases in North American shale oil and shale gas production, it is now clear that these resources might play an increasingly important role in non-OPEC medium- and long-term supply prospects”.
Reports said OPEC has been slower than some to acknowledge the impact that new technologies such as hydraulic fracturing may have on supply.
In OPEC’s new forecast, shale oil will contribute 2 million barrels per day to supply by 2020 and 3 million bpd by 2035. For comparison, 2 million bpd is equal to the current output of OPEC member Nigeria, which is Africa’s top exporter.
Fracking involves pumping chemical-laced water and sand into a well to open cracks that release oil and gas.
The technology has transformed the production outlook in North America but drawn criticism from environmentalists, although the industry insists it is safe as long as wells are properly built.
OPEC said that in the medium-term shale oil would continue to come from North America only, but other parts of the world might make “modest contributions” in the longer term. Shale oil and gas may also play a role in Opec members themselves.
Previous editions of the OPEC report saw no significant supply addition from shale oil. As recently as June, oil ministers including Rafael Ramirez of Venezuela played down the prospects as OPEC met in Vienna for its last meeting to set output policy.