BP sees US shale output holding steady
US shale production will remain near present levels for the next 20 years, but a slowdown in output from 2035 will see demand for Opec crude rise, BP said in its Energy Outlook 2013-2035, released earlier this week
However, the report played down unconventional potential outside the US, saying it is unlikely that any significant shale production will come on stream in the UK and continental Europe, for example, for at least two decades.
BP’s chief economist Spencer Dale said that the US’ unique regulatory and political environment, as well as its geology and legacy onshore infrastructure, had fostered the rapid growth of the country’s unconventionals sector. He added: “Our view is that the oil market will grow out of its current weakness. It may well take several years, but our view is that as the strong growth in tight oil flattens out and the global economy continues to grow, the oil market will rebalance.”
Although growth of the US shale-oil industry will eventually flatten, there are no signs of that happening over the next two decades, Dale said. BP expects the US to become a net energy exporter this year, and to be self-sufficient in energy by the 2030s.
US shale-oil output reached 1.5 million barrels a day (b/d) last year, reducing the market’s need for Opec crude. The report said: "This pressure on Opec is likely to persist in the early years of the outlook and the response of Opec to this reduction is a key uncertainty.
"Further out, as tight oil supply growth slows and demand strengthens, the call on Opec crude begins to increase, exceeding the historical high (32 million b/d in 2007) by 2030.”
BP sees global energy consumption increasing 37% during the forecast period, on the back of Asian demand, most notably from China and India.
At the report’s launch, BP chief executive Bob Dudley said: "The strong growth of US tight oil has had a dramatic impact, with oil increasingly flowing from west to east rather than east to west."
The company expects China to edge out the US as the world’s top oil consumer by 2035.