'Minimal impact of shale gas on GCC nations for next 20 yrs'

The negative impact of shale gas on GCC countries will not be significant for at least 20 years due to high cost of the natural resource and its projected growth in Asia's oil consumption, according to a new report.
The report, by Kuwait-based Asia specialist investment firm Asiya Investments, says that Asia's oil consumption growth will outpace natural gas consumption during the same period.
The findings were presented in Asiya Investments' report "Shale gas impact on the Gulf Cooperation Council (GCC)".
The GCC countries are -- Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates.
The report outlines three factors that will sustain the GCC's leading global position as an energy exporter despite advancements made in fracking technologies.

Commenting on the report, Asiya Investments' Economist, Dana Al Fakir said: "There is much hype about shale oil and gas these days, and much of it is true, especially in the US. But on the global scene we see no major changes in the dynamics of Gulf oil in the next two decades".

Consumption is projected to continue to grow driven by fossil-fuel hungry Asian economies.
And the Gulf is successfully shifting their attention to cater to that demand.
According to Asiya Investments' Senior Economist, Francisco Quintana, Asia will play a more central role in the Gulf's exports.
"However prices will probably be affected, reducing oil revenues in the GCC and making Asia more competitive due to cheaper inputs," he said.

According to the report, there are high costs for importers to bear when they switch from conventional oil to natural gas, add to that a second factor of time required to establish a more stringent regulatory framework for shale energy to adhere to environmental concerns.
"Last, and most importantly, Asian demand is rising for conventional oil, which will prevent the world's energy landscape from rapidly changing. In fact, the EIA expects China to rely massively on coal and oil to cover around 80 per cent of its energy needs in the next two decades," the report said.
Even though China has the largest reserve of shale gas in the world (19 percent of the total, putting it ahead of the US, which holds 13 per cent), and enjoys a regulatory framework that supports the development of shale gas technology, the country has technical issues that make exploitation extremely expensive like the lack of water, depth of the gas deposits, proximity to urban areas and other factors outlined in the report.

Even with all the efforts in place, China will barely match 40 per cent of US shale production by 2020, and that's according to Chinese energy authorities.
OPEC projects China's imports of crude oil to outpace the US crude oil imports by 2014, as its rising refining capacity is propping up demand.
The rest of Asia will also play an important role in keeping oil demand high.