Canada set to join the shale oil revolution, say industry experts

Montney, Duvernay formations could join the big leagues with Permian, Eagle Ford plays

Light and tight.

In terms of crude intentions, many believe that’s the future of Western Canadian oil production.

Canada is set to follow the United States shale oil revolution, say key industry players, who believe that the Duvernay and Montney formations could soon join the shale production big leagues alongside names like Permian, Eagle Ford and the Bakken.

“The potential is absolutely huge,” Mark Salkeld, president of the Petroleum Services Association of Canada, recently told Reuters.

According to the National Energy Board, the Duvernay and Montney formations in Alberta and B.C. collectively possess:

• 500 trillion cubic feet of natural gas;
• 20 billion barrels of natural gas liquids; and
• 4.5 billion barrels of oil.

“The Montney is thought to have about half the recoverable resources of the whole oilsands region, so it’s formidable,” Seven Generations Energy CEO Marty Proctor tells Reuters.

Canada’s shale oil industry produces about 335,000 barrels a day, according to analysts. Multinationals have also taken notice—Chevron announced its first Canadian shale development in November, in the Duvernay; ConocoPhillips is in the mix; and the Duvernay ranks No. 2, behind only the Permian, on Royal Dutch Shell’s shale investment plans for 2018.

“Increasingly we are going to see light tight oil and liquids-rich natural gas forming a key part of Alberta’s energy future,” said Margaret McCuaig-Boyd, Alberta’s energy minister.

American oil production, meanwhile, hit a very significant milestone in recent months—topping 10 million barrels a day in November for the first time in 48 years. That makes the U.S. the world’s third largest oil producer, behind Russia and Saudi Arabia.

"The U.S. could add upwards of two million barrels a day from where we are today by the end of 2019," Daniel Yergin, vice chairman of IHS Markit, tells CNBC.

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