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Several Countries Eye Development of Shale Resources but Huge Capital Required, Says Wood Mackenzie

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A handful of countries are seeking to advance shale energy resources to boost their energy security, Wood Mackenzie said in a report on Thursday, including Algeria, the UAE, Mexico, Australia, Turkey and Indonesia.

The researcher said that counting in their favor is the fact that the world's oil majors who have the expertise to develop the resources, have no other resource with US borders on the scale of the Permian Basin that is competing for the necessary capital.

Algeria has vast reserves with its Lower Silurian shale offering the potential for export via pipeline, with Europe a favored market due to its proximity. Oilfield service bottlenecks are one obstacle to surmount in the country where Exxon Mobil (XOM) and Chevron (CVX) have exploration partnerships.

The UAE's Abu Dhabi National Oil is approaching final investment decisions on unconventional gas that will further the country's 2030 target for self-sufficiency, Wood Mackenzie said. Drilling could proceed at more than 300 wells per year, it noted.

In Mexico, Pemex has set a 2030 target for production of shale gas and tight oil amid trade tensions with the US.

Australia meanwhile is developing the Northern Territory Beetaloo project which aims for LNG backfill and to supply the country's eastern coast.

In Turkey, Continental is developing projects in the Diyarbakir and Thrace Basins and working at a comparatively fast pace, Wood Mackenzie said.

In Indonesia, regulators are seeking US participation in developing its Sumatra basin tight oil which features lacustrine sediments, previously thought to rule out the possibility of production until this was later achieved in the US Uinta basin.

Subsurface and regulatory challenges have jointly slowed international shale development in the 2010s.

Oil majors spent a combined $230 billion acquiring and developing US Permian Basin assets between 2012 and 2025, giving them skillsets that they are now looking to use in assets located elsewhere.

Companies are now looking at around 20 "high-graded plays" versus more than 100 assessed in the prior decade.

Continental Resources has entered Argentina's Vaca Muerta via several deals, forming a joint venture with Turkey's state oil company. EOG has established a presence in unconventional resources in Bahrain and the UAE, Wood Mackenzie said for resources that have undergone assessment previously.

The Vaca Muerta resources and Saudi Arabia's Jafurah are both considered achievable viable plays outside North America, the report said, with potential to produce more than 2.5 million barrels of oil equivalent per day after investments of around $250 billion.

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