China, Argentina Are Significant Shale Gas, Tight Oil Producers After North America

Outside of North America, China and Argentina were the only countries producing commercial volumes of shale gas and tight oil, said EIA in a report.

The United States is by far the dominant producer of both shale gas and tight oil. Canada is the only other country to produce both shale gas and tight oil. China produces some small volumes of shale gas, while Argentina produces some small volumes of tight oil.

For the last two years, China has drilled more than 200 wells, and Argentina has drilled more than 275 wells. Each country has the potential to significantly increase production of shale gas and tight oil, EIA report stated.

In Argentina, many international companies hold leases and have drilled wells in shale formations. Much of the initial activity has targeted shale oil and natural gas in the Neuquen Basin's Vaca Muerta shale formation, located in west-central Argentina. National energy company Yacimientos Petroliferos Fiscales (YPF), the largest shale operator in the country, reported production in April 2015 of 22,900 barrels per day (b/d) of oil and 67 million cubic feet per day (MMcf/d) of natural gas from three joint ventures in Vaca Muerta: one with Chevron at the Loma Campana field, a second one with Dow Chemical at the El Orejano field, and a third joint venture with Petronas at La Amarga Chica field, EIA said.

In addition, China's national oil company Sinopec and Russia's national oil company Gazprom have recently signed a memorandum of understanding with YPF to jointly develop shale from the same basin.

China has targeted the Longmaxi formation in the Sichuan Basin, located in south-central China, as its initial shale gas exploration and development objective. While several international companies are active in China, much of the early effort has been led by Sinopec and China National Petroleum Corporation's (CNPC) PetroChina, two of China's national oil companies. According to China's Ministry of Land and Resources, these two companies are on schedule to reach 600 MMcf/d of shale gas production by the end of 2015. CNPC has drilled 125 shale wells, bringing 74 of them into production, and is on schedule to produce 250 MMcf/d of shale gas by the end of this year. Sinopec has a commercial-scale effort underway at the Fuling shale gas field in the Sichuan Basin, currently producing 130 MMcf/d. By the end of 2014, Sinopec completed 75 test wells at the Fuling field, with plans to drill an additional 253 wells.