Panic in OPEC as China moves to exploit kerogen shale

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Panic in OPEC as China moves to exploit kerogen shale

Sunday, 02 June 2013
The Guardian (Nigeria).

AS the second largest oil-consuming nation – China – is set to commence the production of shale oil and gas, the international oil market is expected to come under more pressure soon.

Oil shale, also known as kerogen shale, is an organic-rich fine-grained sedimentary rock containing kerogen (a solid mixture of organic chemical compounds) from which liquid hydrocarbons called shale oil (not to be confused with tight oil - crude oil occurring naturally in shale) can be produced. Shale oil is a substitute for conventional crude oil; however, extracting shale oil from oil shale is more costly than the production of conventional crude oil both financially and in terms of its environmental impact.

Deposits of oil shale occur around the world, including major deposits in the United States (U.S.). Estimates of global deposits range from 2.8 to 3.3 trillion barrels of recoverable oil.

The imminent commencement of shale oil and gas exploration in China reverberated at the just-concluded Organisation of Oil Exporting Countries (OPEC) in Vienna, Austria, where the international oil cartel raised a committee to “study the likely impacts of the discovery on the international oil prices and the likely economic impacts on the oil-producing countries.”

Nigeria’s Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, revealed the setting up of the committee to The Guardian at the venue of the meeting in Vienna at the weekend.

The minister, who remains the only female voice among the member-nations, said the discovery of shale oil and gas had made exploration of the African market by Nigeria imperative.

She said: “A committee has been set up to examine the impact of the shale oil production on our considerations in not too distant future. The shale oil discovery is a concern but we also respect the sovereignty and integrity of every country to provide sustainability in terms of their oil and gas, including their other hydrocarbon needs. I must say here that the discovery is also an opportunity for Africa as a continent to begin to look inwards with a view to creating an alternate market within the continent. We have a very great scope for energy in Africa.

“The demand is for product but there is a lot of refining existing with some coming up both within Africa and within the African region’s offshore. The issue now is that we must begin now to see the continent as an alternate market both in terms from both the supply and demand side.”

Alison-Madueke stressed that Nigeria would continue to explore Asia but was quick to add: “Asia has always been an alternate market for quite a long time and it will remain so for the future. It is very clear that Asia itself will keep having growing energy needs for quite a while to come. But we must remember that China itself is likely to discover shale gas and oil pretty soon.”

Meanwhile, going by the utterance from the Secretary-General of OPEC, Abdullah al-Badri, the emergence of a new scribe may not be determined solely by regional consideration, but the combination of experience and educational qualification will play equal measure.

While he revealed that discussions were still ongoing in an attempt at finding a suitable scribe for the oil cartel, he insisted that the scribe that would emerge must be a qualified one.

He added: “Yes, there are discussions among member- countries pertaining to the secretary-general but such a secretary-general must be a qualified person, serious and must have the experience.”

Because the international oil market fundamentals are expected to swing significantly, member-countries are admonished to, “if required, take steps to ensure market balance and reasonable price levels for producers and consumers, and member-countries reiterated their readiness to rapidly respond to developments that might place oil market stability in jeopardy.

“Therefore, member-countries are enjoined to adhere strictly to the existing production ceiling of 30 million barrels per day.”

http://www.ngrguardiannews.com/index.php?option=com_content&view=article...