Estimate for Williston Basin Oil Resources is Doubled
Last week the U.S. Geological Survey (USGS) provided an update of oil and gas resources in the Bakken region. This was their first update since a 2008 report that estimated mean undiscovered volumes of 3.65 billion barrels of oil and 1.85 trillion cubic feet of natural gas in the region. The new estimate includes the Three Forks formation which largely lies underneath the Bakken in the Williston Basin that sprawls across North Dakota, South Dakota, Montana, and southern Saskatchewan.
The new USGS assessment stated that the Three Forks formation had not been previously assessed, but that an assessment was warranted based on a rise in drilling and production in the formation. Inclusion of the Three Forks formation added an estimated mean resource of 3.73 billion barrels of oil to the estimated 3.65 billion barrels of oil in the Bakken formation for a total estimated resource of 7.4 billion barrels of undiscovered, technically recoverable oil in the two formations. The two formations were also estimated to contain a mean of 6.7 trillion cubic feet (tcf) of undiscovered, technically recoverable natural gas and 0.53 billion barrels of undiscovered, technically recoverable natural gas liquids (NGLs).
The new assessment represents a doubling of estimated undiscovered, technically recoverable oil and a nearly threefold estimated increase in mean natural gas and mean NGL resources from the 2008 assessment. The increase in estimated resources is primarily due to the inclusion of the Three Forks Formation. However, Rigzone reported that a USGS spokesperson explained that the size of the Bakken estimate also increased:
“It’s deceptive, because although our current estimate of 3.65 billion barrels of oil for the Bakken is numerically the same as the 2008 assessment for the Bakken, you have to remember that oil companies have been producing millions of barrels of oil since the 2008 assessment, gradually transforming the undiscovered resources to the proven reserves then production barrels,” the spokesperson commented. “Because our assessments do not include proven reserves or produced barrels of oil, the 3.65 billion does represent an increase.”
While recognizing that “undiscovered resources” are not quite a bird in the hand, these estimates are likely to assure that the oil boom in North Dakota continues for some time. If nothing else, companies will be searching for oil there.
How much oil does this represent? The US currently uses nearly 7 billion barrels of oil per year, so the total from the new assessment of undiscovered oil would represent just a bit over a year of US oil consumption at current rates. Petroleum imports have been declining, but the US still imports about 3 billion barrels of oil per year. Thus, in terms of imports, this new assessment of undiscovered oil amounts to a little over 2 years of US petroleum imports.
So, while it is a lot of oil, it is going to take a lot more than that to make the dreams of US petroleum independence come true. I do expect US oil production to continue to climb for another 3 to 5 years though, primarily as a result of a continued growth in oil production in the Williston Basin, as well as the Permian Basin and Eagle Ford Shale in Texas.
(Related: The Amazing Reversal of the US Oil Industry)
Link to Original Article: Estimate for Williston Basin Oil Resources is Doubled
2015 EIA Energy Conference
June 15-16, 2015 - Washington, D.C.
Platts North American Crude Oil Summit
February 26-27, 2015 - Houston, TX