The US' Bakken Shale oil field, which spans Montana and North Dakota, has become so prolific that at least one big independent operator there estimates industry's output potential there at a whopping 1.2 million b/d by year-end 2016.
That's a heck of a lot of oil for a play that was barely breathing six or seven years ago. And that figure is even higher than the 700,000 b/d or so North Dakota officials were citing as a peak awhile back.
Continental Resources CEO Harold Hamm, presenting his estimate of a Bakken peak of 1.2 million b/d at Platts' Rockies Gas & Oil Conference in Denver this week, said volume girth in the play is expanding by around 5,000-10,000 b/d per month.
Other Bakken statistics, courtesy of Hamm: roughly 3,600
horizontal wells have been completed in the field to date "and
we've just scratched the surface," he said. Industry is now
adding about 2,100 wells a year. About 170 rigs are active in
the play.
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Production on the North Dakota side of the field is around
360,000 b/d, while Bentek Energy Senior Energy Analyst Jodi
Quinnell said in a telephone interview that adding in Montana
output brings the total output figure for the play to around
410,000 b/d. Bentek is owned by Platts.
Moreover, Hamm said a recent Continental study of the field's
potential calculated recoverable oil potential of 24 billion
barrels with today's technology. That number is substantially
more than earlier US government estimates of as much as 4.38
billion barrels a couple of years ago, and that was up from a
trifling 151 million barrels in 1995.
There seems to be no question that the Bakken can deliver,
production-wise. But pipeline-wise, crude takeaway presents
a problem. With so much oil oozing out of the ground, the
Bakken needs more of it. Building new lines and finding new
markets for it are big issues on the minds of both operators and
pipelines these days.
Some of Bakken's production goes to Clearbrook, Minnesota, some directly to St James, Louisiana. But a large chunk goes to Cushing, Oklahoma where there is simply too much oil in storage right now. Steve Wuori, president of liquids pipelines for Enbridge, said there is now 55 million barrels of crude in storage at Cushing, which is likely a record amount.
Enbridge has a pipeline that takes Bakken's light sweet crude to Cushing, Oklahoma, as do other transporters. The crude arrives in Cushing via Illinois. But Wuori said Enbridge sees finding a non-Cushing and non-Midwest destination for the field's crude as a challenge for his company. He said 430,000 b/d worth of upgrades in some Midwest refineries to take more Canadian heavy crude will displace that capacity for light sweet in that area.
One solution Enbridge is mulling is to reverse a crude
pipeline from Montreal to Sarnia, Ontario, which would enable
Bakken crude to go to the East Coast US. Sarnia is not
necessarily the only destination Enbridge has in mind, though.
The company could reverse a pipeline at Portland, Maine that
takes crude imports west, and from there unload crude and run it
to Philadelphia or even St. John, New Brunswick refineries, he
said.
Wuori would not say when or even whether Enbridge would make a
decision on that option, adding it would depend on commercial
support.
"When you hear the kind of talk we've heard about the bullishness of the play, it certainly looks like there's an urgency to it," he said.
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