Repository for Oil and Gas Energy Research (ROGER)

Abstract:
The decline of domestic natural gas supply and rising demand requires Mexico to import 1/3 of its annual gas consumption of 2.5 trillion cubic feet (Tcf). Yet, Mexico's estimated resource of technically recoverable shale gas (545 Tcf) is the 6th largest such gas resource in the World. Much of Mexico's shale gas resource is in the Eagle Ford Shale, which is a mature shale gas and oil play in the U.S. To aid in determination of whether development of the Eagle Ford Shale in Mexico could reduce the country's dependency on natural gas imports, we evaluated the potential of Mexican shale acreage by comparing the after-tax net present value (NPV) and internal rate of return (IRR) of Eagle Ford shale wells on either side of the U.S.-Mexico border. The initial development of Mexican acreage occurs with a much larger well-spacing (leading to higher acreage acquisition cost per well), which would require 25% higher development cost as compared to Texas acreage. Consequentially, Texas wells have better net present value (NPV) and higher internal rate of return (IRR) than Mexican wells, in general. The principal explanation is that the signing bonus will be much higher in Mexico than in Texas, partly effectuated by the lower well spacing for unrisked acreage. Results of our study provide potential operators and investors with a preliminary indication of Eagle Ford Shale well economics in Mexico. Our study includes sensitivity analyses for both non-escalated and escalated gas prices, for drilling and completion (D&C) costs, and for leasehold cost. The economic appraisal accounts for both single- and multiple-well development scenarios with P10, P50 and P90 production forecasts.

Abstract:
Oil production in the United States increased in 2009 for the first time since the oil peak due to fracking. This and the slight decrease in oil consumption, resulted in a significant fall in U.S. oil imports. This major change inspired this paper, in which we analyse potential changes in self-supply (the extent to which the international oil production of transnational companies meets the oil requirements of the United States). The period between 2009 and 2013 was studied, and compared with that of 2005 to 2008, by estimating and evaluating a set of indicators related to the degree of self-supply of these transnational companies. The relevance of this work is twofold: on the one hand, because of the economic and geopolitical implications of this self-supply and on the other hand, because of the contribution of the research to energy economics. The research suggests a continuation of a low degree of self-supply but for other reasons than those formulated in the hypothesis which are based on the consequences of fracking.

Abstract:
The trend towards globalization can be observed for many years. It is reflected by the ongoing elimination of trade barriers between countries and the introduction of a system of mutual recognition of quality standards. The best example is the European Union, where a common market for many industries has been developed. Such a common market has already existed before in the United States of America and that this is why the negotiations on the merger of the largest and most developed economies in the world started in 2013. The currently negotiated agreement, the Transatlantic Trade and Investment Partnership (TTIP) is designed to eliminate barriers to trade and capital flows between the two mentioned markets. The article attempts to evaluate the trade of energy commodities, namely crude oil and natural gas, between the European Union and the United States. The estimates for the next years are based on historical data and the current state. The dynamics of natural gas and crude oil production in the European Union and the United States, as well as changes in the import and export of these energy resources, have been shown. The volume of gas production from the largest North American deposits was also subjected to analysis. Special attention was paid to natural gas from unconventional deposits, as its production is expected to grow continuously until 2040. Meanwhile, the production of gas from conventional deposits is expected to decrease. The rest of the paper is focused on the balance sheets of cash for oil and natural gas. It was pointed out that the market situation for both commodities is different. In the EU, the production and consumption of both crude oil and natural gas gradually decreases, while in the United States this trend is reversed. On the other hand, some similarities can be seen in the refining industry. In recent years, many refineries were closed both in the European Union and in the United States. However, though this trend was more pronounced in Europe. In the case of liquefied gas (LNG), the expansion of US gas to Europe can be expected. Currently, the United States is building about 30 export terminals and production surpluses will certainly be exported to Europe. Judging by the pace of development of export terminals, it can be assumed that the power of condensation can reach up to 110 million tons in the near future and, as a consequence, natural gas in the form of LNG will be supplied to the European market.