The unconventionals revolution is poised to enter a new stage, maturing into an increasing global phenomenon beyond the US before the end of the decade, said Keisuke Sadamori, director of energy markets & security directorate of Paris-based International Energy Agency (IEA).
Commenting on the IEA’s midterm oil market report to 2019 at the World Petroleum Congress on Wednesday, Keisuke said that several countries will seek to replicate the US success story.
The report projects that, by 2019, tight oil supply outside the US could reach 650,000 barrels per day, including 390,000 bpd from Canada, 100,000 bpd from Russia and 90,000 bpd from Argentina.
Economic recovery will buoy demand, but the dynamics of demand growth will undergo a structural shift because of factors such as increase efficiency gains.
Worsening political stability and security issues add major downside risk in Iraq and Libya, he said, adding that Iraq faces formidable challenges in meeting ambitious production targets, although its capacity is expected to rise by 40% or 1.3 million bpd to 4.5 million bpd by 2019.
Overall oil demand will approach 100 million barrels per day by 2019 at an annual average of 1.3% as macroeconomic momentum builds, but the growth will rein in after 2015, he said.
Asia and Middle East will continue to dominate the demand growth, with Africa to gain momentum as well as former Soviet Union countries and the Americas.
Global oil supply capacity, led by OPEC, will continue to grow, with total supply capacity to grow by 9 million bpd to 105 million bpd on exceptionally strong non-OPEC growth, but slowing later in the forecast period.
Keisuke warned, however, that turmoil in the Middle East and North America turmoil and weak investment climates will weigh on OPEC capacity growth.
OPEC capacity is seen as growing by 2.1 million bpd to 37.1 million bpd in 2019, with Iraq to supply 60% of the growth.
Canada and USA will lead the non-OPEC growth, with 65% of total non-OPEC supply growth to come from the two countries.