UPDATE 1-OPEC admits significant impact of shale oil on supply

Thu Nov 8, 2012 3:44pm GMT
 

* Shale oil will contribute to lower demand for OPEC crude

* OPEC cuts medium, long-term global oil demand estimates

* Assumes oil price will average $100/bbl in medium term (Adds OPEC secretary general comments, para 9)

By Alex Lawler

LONDON, Nov 8 (Reuters) - OPEC acknowledged for the first time on Thursday that technology for extracting oil and gas from shale is changing the global supply picture significantly, and said demand for crude would rise more slowly than it had previously expected.

In its annual World Oil Outlook, OPEC cut its forecast of global oil demand to 2016 due to economic weakness and also increased its forecast of supplies from countries outside the 12-nation exporters' group.

"Given recent significant increases in North American shale oil and shale gas production, it is now clear that these resources might play an increasingly important role in non-OPEC medium- and long-term supply prospects," the Organization of the Petroleum Exporting Countries said in the report.

OPEC has been slower than some to acknowledge the impact that new technologies such as hydraulic fracturing - known as "fracking" - may have on supply. Conoco's Chief Executive Ryan Lance has gone so far as to predict North America could become self-sufficient in oil and gas by 2025.

In OPEC's new forecast, shale oil will contribute 2 million barrels per day (bpd) to supply by 2020 and 3 million bpd by 2035. For comparison, 2 million bpd is equal to the current output of OPEC member Nigeria, which is Africa's top exporter.   Continued...

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