The North American shale oil and gas boom is fascinating Americans with its stunning potential, as it propels U.S. oil production to the highest level since May 1989.
It is also creating a formidable profit-making opportunity for those who know how to invest in this burgeoning industry.
Even better news for investors - as Money Morning Global Energy Strategist Dr. Kent Moors has said repeatedly - the shale revolution isn't confined to the United States and Canada; it's going global.
A recent study by the Energy Information Administration (EIA) found that - using currently available technology - global shale resources hold a whopping 32% of the world's recoverable natural gas and 10% of the world's recoverable oil.
The study, published on June 10, also found that the United States is only fourth in recoverable shale gas resources, with 665 trillion cubic feet (tcf). Leading the pack were China (1,115 tcf), Argentina (802 tcf), and Algeria (707 tcf).
Regarding recoverable shale oil resources, the United States ranked second, with 58 billion barrels. Russia came in first, with 75 billion barrels, and China and Argentina ranked third and fourth, with 32 billion and 27 billion barrels respectively.
These impressive figures mean only one thing: tremendous opportunity for those who know how to invest in the shale oil boom's international debut.
IHS Global: Shale Oil Boom to Be Duplicated
The EIA study isn't the only one pointing to a global shale revolution.
The latest report by IHS Global Insight states that the 23 most promising global shale formations hold about 175 billion barrels of extractable oil, with worldwide shale fields containing seven times the recoverable shale oil contained in North American basins.
The firm's geological study found 148 shale plays globally that could have up to 300 billion barrels of recoverable oil. In comparison, IHS believes North American shale formations have roughly 43 billion barrels of commercially recoverable shale oil.
The report said that those reserves may potentially produce, by 2020, 5 million barrels of oil per day. That's more than the current production of Canada or Iraq.
The study specifically pointed to three potentially vast shale oil fields: the Vaca Muerta formation in Argentina, the Bazhenov Shale in western Siberia, and the Silurian formations in North Africa.
Richard Anderson of Eurasia Drilling, the most active drilling contractor in Russia, spoke to the Financial Times. According to Anderson, the Russians can and will discover the methods to access the shale formations, and "then we're off to the races. My guess is it will be like the Eagle Ford and the Bakken."
Moors discussed the Vaca Muerta ("dead cow"), which is thought to hold as much as 23 billion barrels of oil equivalent, in August.
He believes the recent $1.24 billion agreement between Argentina's YPF SA (NYSE ADR: YPF) and Chevron Corp. (NYSE: CVX) to develop this resource is the most significant shale agreement in the hemisphere outside North America.
Other companies funding development of the Vaca Muerta include Dow Chemical Co. (NYSE: DOW) and Bridas, which is partly owned by China's Cnooc Ltd (NYSE ADR: CEO).
How to Invest: And the Prime Beneficiaries Will Be...
But the companies searching for oil and gas won't be the only winners in this high-stakes game.
Developing shale formations and drill wells requires enormous spending on equipment, in addition to experience and expertise to launch a massive program of hydraulic fracturing (aka fracking) and horizontal drilling.
This knowledge base will be key for countries to keep down the cost of producing every barrel of shale oil or foot of shale gas.
For savvy investors, this means one thing:
"There will be some genuine opportunities for North American technical, equipment, and production service companies," said Moors.
GBI Research believes the industry will enjoy a boom of its own in the years ahead. It forecast that business at global oil services companies will soar 72%, from $152 billion in 2012 to $213 billion in 2017.
It makes sense then to look at the major oil service companies, as Moors has, for tips on how to invest in the global shale boom.
These include Schlumberger Ltd. (NYSE: SLB), Halliburton Co. (NYSE: HAL), Weatherford International Ltd. (NYSE: WFT), and one of Moors' favorites, National-Oilwell Varco Inc. (NYSE: NOV).
Companies like these stand to benefit from the expansion of the shale revolution around the world. And those who know how to invest in these companies stand to reap maximum profits as well.
Learn more about how to profit from the shale oil boom in this free exclusive Money Morning report: The New Way to Join the Shale Oil Millionaires' Club
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- EIA Study:
Shale Oil and Shale Gas Resources Are Globally Abundant - FOX Business:
IHS: Shale Oil Boom Could Go Global - Financial Times:
Study Points to Vast Shale Oil Fields - ASD Reports:
Global Oilfield Services Industry to Top $200 Billion by 2017