Luis Esteves

PhD Email: lestevesanp.gov.br (lesteves[at]anp[dot]gov[dot]br) Phone: - Office: - CV

 

Doctoral researcher in economics: from November 2016, defended 3 May 2021

PhD Supervisor: Catherine Locatelli

Thesis title: Natural gas frontier zones: a study of the US and Argentinian unconventional reservoirs cases

Composition of the jury:

•  Sandrine MICHEL, professeur, université de Montpellier 1, rapporteur ;
•  Catherine LOCATELLI, chargée de recherche CNRS, université Grenoble Alpes, directrice de thèse ;
•  Helder Queiroz PINTO JUNIOR, professeur associé - universidade federal do Rio de Janeiro, rapporteur ;
•  Sylvain ROSSIAUD, maître de conférences, université Grenoble Alpes, membre ;
•  Jacques PERCEBOIS, professeur émérite, université de Montpellier, membre.

Abstract: The oil and natural gas production in the United States (US) has increased sharply since the early 2000s on the basis of unconventional reservoirs’ development and, in particular those of shale. Given the huge scale of this development, it has been called a ‘revolution’, substantially influencing the O&G market. This remarkable increase in shale production allows the US to position itself today as the world's leading producer of natural gas. The determinants of this rapid growth have been the subject of numerous studies aimed at determining the main variables allowing large-scale commercial exploitation of unconventional reservoirs. These are in particular the factors that could reproduce this ‘revolution’ in other countries. These questions are essential for the future dynamics of natural gas markets. The development of unconventional reservoirs also sheds light on the possibilities of developing hydrocarbons in areas qualified as frontier zones beyond unconventional ones. The commercial exploitation of shale reservoirs fits into this category. To reach our objective, this thesis first defines the O&G frontier zones according to their economic characteristics. These areas are featured by high risks, high costs and a technological challenge to achieve its commercial exploitation. These three variables constitute constraints for their production. Therefore, the objective of this thesis was to determine the factors that allowed to overcome the three main constraints identified as limiting their development. From the characteristics of the frontier zones and from an approach based on both, evolutionary theory and historical institutionalism, we defined an analytical framework in order to understand and characterize the factors determining the development of O&G frontier areas based on unconventional shale reservoirs. This analytical framework has been applied to the cases of the US and Argentina The US case study is a central point of reference as it is currently the only example of massive commercial exploitation of shale gas on a global scale. The objective of the Argentine case study is to refine, classify and systematize the conclusions drawn from the US case regarding the main determinants of the development of frontier zones. The analysis of the two cases leads to three main conclusions. First, the two countries faced natural gas supply problems, leading government to launch efforts aiming to improve the profitability of natural gas exploration and production. Second, the exploitation of unconventional shale reservoirs is sensitive to natural gas prices. Consequently, we observe successive institutional changes in the regulatory framework which gradually prevent government to define natural gas prices, in particular to lower them for social reasons. The government's efforts have largely focused on financial support for natural gas producers, which has had a positive influence on the development of unconventional reservoirs. Third, there is cooperation between the public and private sectors to accelerate technological adaptation. Concerning the technological adaptation, we identify a learning curve in both cases (Barnett shale for the US and the Vaca Muerta region for Argentina) with two well-defined stages. The characteristics of each stage of the learning curve correspond to Dosi (1982) description of the gradual process of introducing technological advancement and the market structure (mainly the presence of firms with lower risk aversion in the first phase and competition in the second phase).