Argentina and China lead shale development outside North America in H1 2015

As recently as last year, only four countries in the world were producing commercial volumes of either natural gas from shale formations or crude oil from tight formations: the United States and Canada, and more recently, Argentina and China. In the last two years, China has drilled more than 200 wells, and Argentina has drilled more than 275 wells. Following are the details on the shale development-

In Argentina:

Much of the initial activity has targeted shale oil and natural gas in the Neuquen Basin's Vaca Muerta shale formation, located in west-central Argentina. YPF, the largest shale operator in the country, reported production in April 2015 of 22,900 bpd and 67 MMcf/d from three joint ventures in Vaca Muerta: one with Chevron at the Loma Campana field, a second one with Dow Chemical at the El Orejano field, and a third joint venture with Petronas at La Amarga Chica field.

In addition, Sinopec and Gazprom have recently signed a memorandum of understanding with YPF to jointly develop shale from the same basin.

In China:

China has targeted the Longmaxi formation in the Sichuan Basin, located in south-central China, as its initial shale gas exploration and development objective. According to China's Ministry of Land and Resources, Sinopec and CNPC (PetroChina) are on schedule to reach 600 MMcf/d of shale gas production by the end of 2015. CNPC has drilled 125 shale wells, bringing 74 of them into production, and is on schedule to produce 250 MMcf/d of shale gas by the end of this year. Sinopec has a commercial-scale effort underway at the Fuling shale gas field in the Sichuan Basin, currently producing 130 MMcf/d. By the end of 2014, Sinopec completed 75 test wells at the Fuling field, with plans to drill an additional 253 wells.

In other countries:

Countries including Poland, Algeria, Australia, Colombia and Russia have also begun to explore for shale gas and tight oil. Drilling is also underway in Mexico, particularly in the country's portion of the Eagle Ford Shale and in La Casita formation within the Burgos Basin in northeastern Mexico. In May 2015, Pemex released the results for 13 of its shale exploration wells, with 10 of these categorized as commercial. These 10 shale gas wells have initial production ranging from 2 to 11 MMcf/d. Pemex also drilled three horizontal wells into the Tampico-Misantla Basin's Pimienta formation in 2013, and the company plans to complete all three wells this year.

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