Energy and Mining International – Drilling Down (

logo_media_EMIInspired by the American energy renaissance, the Middle East and North Africa (MENA) region is increasingly exploring the potential to turn its own unconventional reserves into the biggest boom in the energy market in decades.

And why not? Conventional gas and oil production are still cheap in the Middle East, but decreasing reserves and increasing domestic demand is driving accelerated interest in unconventional resources. It makes perfect sense for some of the richest oil-producing regions in the world to seek ways to further exploit these precious natural resources.

Domestic Needs

This summer, Egypt provided a study in the region’s domestic need versus export dilemma. Having committed to long-term export contracts, Egypt was unable to meet domestic demand without the help of emergency imports from Qatar. As domestic energy needs grow, this is becoming a common problem among MENA countries and a driving force behind increasing efforts to unlock shale reserves in the region.

The U.S. Energy Information Administration has estimated North Africa’s technically recoverable shale gas resources at 557 trillion cubic feet (tcf) – as compared to 864 tcf in the United States. The shale gas picture is less clear among Middle East oil exporters, who have declined to disclose their unconventional resource estimates, though some estimates put the figure at 1,500 tcf across all of the MENA countries.

Advantage of Historical Data

MENA countries have some strong advantages, and a few disadvantages, when contemplating production of unconventional oil and gas reserves.

For several MENA countries, extensive conventional drilling has created a wealth of data stretching back decades, saving them millions – maybe billions – of dollars on research and exploration, and the pipeline infrastructure is already robust.

Saudi Arabia, for example, the world’s biggest oil exporter, is looking to develop its shale gas reserves to supply both the petrochemical industry and domestic power generation needs. The Saudi oil minister has estimated that the country has about 645 tcf of technically recoverable shale gas, which would put it after China, the United States, Argentina and Mexico. The oil ministry also estimates Saudi Arabia has another 280 tcf of proven unconventional gas reserves.

Algeria, already the world’s fourth largest gas exporter, is making shale exploration a priority after conducting studies with Eni, Talisman, Shell and Anadarko. Algeria expecting shale reserves in the Ahnet and Berkine basins to rival American reserves.

Libya’s reserves are estimated at about 300 tcf of recoverable shale gas. Libya doesn’t yet have any fracking capacity, but its increased demand for gas to generate electricity and support its manufacturing sector is sharpening its focus on developing its shale reserves.

Oman, Tunisia, Kuwait, Jordan and Egypt are all looking to develop unconventional resources.

Slowing the Boom?

While most MENA exporters have the advantage of data and pipeline infrastructure, water will be an issue for many, requiring the use of newer technologies that use less or no water, and increased pressure on desalination.

MENA exporters are already partnering with American companies and learning from the wealth of U.S. experience with recovery of unconventional resources. Saudi Aramco has invested in Frac Tec International and Halliburton’s fracking expertise has been engaged; Oman’s Petroleum Development Oman is a joint venture between the Omani government and Shell, Total and Partex; Jordan has turned to BP to develop its shale deposits; and Kuwait has signed a technical cooperation contract with Royal Dutch Shell.

Though the historical data will help producers more quickly zero in on productive plays and much of the infrastructure is already in place, it will likely be at least a decade before we start to see commercial development of the MENA countries’ unconventional resources.

Among the things we’ve learned through the American boom in unconventional resources is to expect some surprises in reserve estimates as drilling and recovery technology evolves and advances. Once the technologies are adapted to the regions’ particular geological characteristics and commercial production begins, get ready for a boom possibly unlike anything we’ve seen.

Chris Faulkner is the founder and CEO of Dallas-based Breitling Energy Companies. Faulkner’s diverse and extensive background in the oil and gas industry in North America, Europe and the Middle East covers all aspects of oil and gas operations. Faulkner also serves as an advisor to the ECF Asia Shale Committee and sits on the board of directors for the North Texas Commission.