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OPEC Chief Says Shale Oil Unlikely To Revolutionize Industry

OPEC Chief Says Shale Oil Unlikely To Revolutionize Industry
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Πεμ, 7 Νοεμβρίου 2013 - 18:06
Surging shale oil production from North America is unlikely to revolutionize the global oil industry, OPEC's head said Thursday, suggesting the U.S. and Canadian oil boom will be short-lived.
Surging shale oil production from North America is unlikely to revolutionize the global oil industry, OPEC's head said Thursday, suggesting the U.S. and Canadian oil boom will be short-lived.

"We don't trust that tight oil will have a revolutionary effect on the oil industry," said Abdalla El-Badri, secretary general of the Organization of the Petroleum Exporting Countries. He was speaking after the release of report that suggested OPEC was finally beginning to recognize the impact the U.S. energy boom was having on demand for the group's own oil.

U.S. oil production has surged thanks to new drilling and extraction methods in places such as North Dakota and Texas , boosting output of "shale" or "tight" oil. Some analysts say that threatens demand growth prospects for OPEC, a cartel of some of the world's biggest oil producers.

But Mr. El-Badri said he doubted current production rates could be sustained, pointing to one finding in OPEC's study that North American output will start to slow down from around 2018.

"They are drilling the sweet spots, I think they will be out of sweet spots in coming years," said Mr. El-Badri.

Initially skeptical that U.S. shale oil would have much of an impact on world supply, OPEC has since been forced to revise its predictions as the scale of the boom becomes apparent.

In its annual World Oil Outlook, released earlier Thursday, the group said new oil supply from Canada and the U.S. would reach 4.9 million barrels a day within five years, more than double last year's forecast of 1.7 million barrels a day by 2018.

The organization's member countries, which produce about a third of the world's oil, are due to meet in December to discuss current production levels.

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