[P2P-F] Fw: Are Putin's Shale Hopes Doomed? An Investors POV....

Sat Jun 9 15:09:23 CEST 2012

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Are Putin's Shale Hopes Doomed?
By Keith Kohl | Friday, June 8th, 2012

Since 2008, the title of world's largest oil and gas producer has changed hands several times.
Russia, the United States, and Saudi Arabia have all been battling for bragging rights.
Most recently, Russia managed to regain its natural gas title from the U.S., but then lost its oil crown to the Saudis.
I can almost picture Putin's inner sanctum during energy-related meetings...
At the heart of the matter is how to bring on new production. Desperation must permeate the room.
The heated conversation between Putin and his merry gang of drillers could be taken right out of movie script:
“Are you sure you've searched everywhere?” he'd ask impatiently.
“Yes, sir, we've looked everywhere,” they'd answer.
“And what about the town? The forests? The mountains?”
You get the idea...
We're not talking about a trivial amount of oil here.
No, Russia will need a lot more than the billions of barrels buried in the Arctic seabed if it plans on overtaking Saudi Arabia once again.
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This CEO Accidentally Reveals a Big Secret
Experts say North Dakota's Bakken Oil Pool may hold 4-6 billion barrels of sweet, light crude.
But the CEO of the biggest Bakken oil company just let it slip that there's as much as 24 billion barrels.
The thing is, there's very little land left for drilling leases... and that means Bakken oil companies may be worth 300%-400% more than most investors now believe.
You can watch this CEO's incredible video footage HERE.
In order to get an edge over the others, Russia will have to turn to the one thing that has breathed life back into the North American oil and gas industry since 2008.
Developing our unconventional resources is the sole reason we've been able to reverse a decades-long production decline.
The Russians have good reason to be envious of our success.

The question is will Putin's shale dreams end happily.
We're not so convinced they will — because while they're not short of supply, one look at other would-be shale booms across the globe reveals things aren't progressing as well as they are here in North America...
China and Russia's Jealousy Rages On
As holder of the largest shale gas resources in the world, China sure hasn't been very successful in developing it — and not for lack of trying.
The Chinese are planning to increase shale gas production to 6.5 billion cubic meters in 2015 and to nearly 100 billion cubic meters in 2020.
Considering Chinese output right now is one big goose egg, you can see how ambitious their plans are.
Just how much natural gas are we talking about?
If current estimates project about 36 trillion cubic meters (or 1.2 quadrillion cubic feet, for those of you keeping track) buried under Chinese soil, you can understand why they're so excited.
But it's been slowgoing, to say the least.
Learning the ins and outs of shale production is what led CNOOC to pump billions of dollars into the various shale plays across the United States.
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I Have a Photograph that Could Hand You Thousands by this Time Next Year...
I don't blame you if this sounds far-fetched...
In fact, if I hadn't traveled hundreds of miles to frozen land — just to get the images — I wouldn't have believed it, either.
But once you take a peek at what I found, as well as the reasons it could make you rich, I have no doubt you'll change your mind. 
Now it's Russia's turn to try their luck in the shale race.
One of Siberia's shale formations is being touted as Russia's version of the Bakken.
It's called the Bazhenov Formation — and at nearly 600 million acres, it's been said this area is 80 times the size of the Bakken Formation.
But this isn't a new discovery.
In fact, we've known the Bazhenov's potential this since 2000!
And we're not completely convinced this formation is "the Bakken of Russia."
Our skepticism has nothing to do with the size of the Bazhenov, or even the flow of production that will come from it...
While it's been said output could reach a million barrels per day by the end of the decade, Putin and his comrades won't see a single drop of shale oil until they learn how to properly extract it.
That said, betting on the Bazhenov could end up costing you dearly.
Besides, why bother looking halfway around the world when there are much better opportunities available right here at home?
U.S. drillers are more valuable than they appear...
There's a reason China has been so eager to move into places like the Eagle Ford formation in Southern Texas.
The Middle Kingdom and Russia are both in desperate need of the coveted technology to extract their resources — just one more reason we'll continue to see lucrative deals in U.S. shale.
We saw this firsthand when Statoil shelled out $4.4 billion to buy Brigham...
Here are three more shale stocks investors are cashing in on right now.
Until next time,
Keith Kohl
@KeithKohl1 on Twitter
A true insider in the energy markets, Keith is one of few financial reporters to have visited the Alberta oil sands. His research has helped thousands of investors capitalize from the rapidly changing face of energy. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital as well as Investment Director of Angel Publishing's Energy Investor. For years, Keith has been providing in-depth coverage of the Bakken, the Haynesville Shale, and the Marcellus natural gas formations — all ahead of the mainstream media. For more on Keith, go to his editor's page.
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