Top on the list of potential venues for the next shale boom are China, Russia and Argentina, but the world’s next shale revolution likely will be in Australia, which appears to be the most attractive place for companies to pursue tight oil and gas, according to a Lux Research analysis released recently.
While companies have eyed shale development in China, lured by the prospect of huge reserves and easy financing, Australia is said to have the know-how, experience and infrastructure to be a more attractive place to drill into shale plays.
It also beats out Argentina, which has expansive shale reserves, but has experienced political instability despite attractive government incentives, according to the Lux report, written by research associate Daniel Choi.
Australia also emerged as the third top investment destinations in 2014 after US and Brazil, according to a recent research report published by DNV GL, the leading technical advisor to the oil and gas industry.
“Australia does not have the seemingly bottomless development capital of China, or the powerful government incentives of Argentina,” the Lux report said. “However, Australia more than makes up for this by having the characteristics conducive to successful commercial production, which other front-runners like Argentina, China, U.K., and Poland lack.”
“This includes existing infrastructure, low population density in key shale plays, and citizens who welcome resource extraction through its long mining legacy,” the report said.
Massive projects being constructed in Australia to produce and export natural gas to Asia make the country more attractive for shale exploration.
Chevron is leading the development of two massive LNG projects in Australia, at a cost of around $81 billion. The projects will liquefy and ship natural gas to energy hungry Asian nations.
Certainly, investors are eyeing the massive projects going up in Australia to produce and export natural gas to Asia, where it will fetch high prices.
Shale boom in the United States
The massive glut in shale oil and gas resources has brought about drastic changes in the country, with calls now being made for restrictions on crude oil and liquefied natural gas to be lifted.
It was reported recently by Reuters that countries across the world had been quietly signing deals in recent months to import natural gas from the US, revealing a growing appetite for the fuel overseas as domestic output soars.
Up to a dozen long-term deals, each worth billions of dollars, have been penned behind closed doors with companies in China, Japan,France and Chile as global demand spikes.
Through the agreements, China in particular has emerged as one of the biggest beneficiaries of cheap American natural gas that in the coming years will be piped to Gulf Coast plants and liquefied for shipment abroad in tankers.
But the number of new buyers, and their global scope, show how the United States is taking steps to becoming a major export hub by stealing ahead of rivals in Australia and East Africa, successfully wooing needy Asian buyers even before projects begin construction.
The United States is producing record amounts of natural gas thanks to a drilling boom, and more than a dozen export projects have been proposed.