Unconventional resources have been identified throughout the world and contain enormous in-place volumes but tight and unfamiliar reservoirs challenge the transformation of these resources to supplies. The key issue is whether industry can grow production from unconventional reservoirs at a rate that will offset declines from older conventional reservoirs. E&P companies are attracted to such resources because they have low exploration risk, material production volumes, long-lasting production and exist near mature, stable markets. In addition, with the exception of Canadian bitumen production, current recovery factors are low so these accumulations have the potential for a substantial "technology dividend". At some 7.5 trillion barrels, estimates of the in-place resource of bitumen, extra-heavy oil and shale oil are over three times greater than the 2.25 trillion barrels of recoverable conventional oil estimated to have been discovered to date. Unconventional liquids production from Canada and Venezuela currently comprises about 2% of world liquids production. Current projections indicate these giant resources will add no more than about 400,000 barrels of annual new production. This is les than desired to offset global declines of 5 to 6 MMb/yr. Excluding gas hydrates, remaining recoverable resources of the three principal gas resource play types are estimated at over 1,000 trillion cubic feet and there is significant potential for growth in unconventional gas resources outside North America. Even though U.S. unconventional gas well completions have tripled the growth of gas from unconventional reservoirs has not offset decliines in conventional gas production.


Among the three pillars of future oil and gas supplies, the unconventional resource potential greatly exceeds that of the other two pillars - growth to known fields and yet to find fields. Estimated in-place resource of bitumen, extra-heavy oil and shale oil are about 7 times greater than the estimated recoverable conventional liquids from field growth and yet to find sources. Excluding gas hydrates, estimated in-place volumes of unconventional gas are estimated to be 4 to 5 times greater than estimated recoverable conventional gas from field growth and yet to find sources. In-place unconventional resources are huge but there are substantial challenges to transform these resources into supplies.

Unconventional hydrocarbons are found in tight, low permeability, low porosity, low recovery "difficult to produce" rock formations, such as tight sands, shales, chalks and coal seams. These rocks require distinctive completion, stimulation, and / or production techniques to recover the hydrocarbons. Fractures often are critical to establish economic recoveries and unconventional reservoirs may be over or under pressured and typically are not affected by hydrodynamic influences. Unconventional reservoirs often are described as "resource plays". Many are pervasive throughout a wide area and also are referred to as "Continuous -type Deposits". Realistically, the boundaries between "conventional" and "unconventional" are gradational and change over time. For purposes of this report original definitions applied some 20 years ago to define U.S. tight gas reservoirs are used. Tight reservoirs were defined as having less than 0.1 millidarcy permeability and tight reservoirs typically have 13% or less porosity. Unconventional reservoirs also were characterized by low recovery factors - often less than 10% recovery on primary recovery. Conversion-sourced hydrocarbons such as gas to liquids and coal to liquids, fermentation of carbohydrates, non-fossil renewable resources and gas hydrates are not included in this report.

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