The shale gas revolution has improved global energy security and has helped a "mature industry be reborn through technology," ConocoPhillips CEO Jim Mulva said this week in Qatar.
Speaking to delegates at the World Petroleum Congress, Mulva said natural gas "can and must be part of the world energy solution, for both the short and long term."
By using horizontal drilling and hydraulic fracturing, "production is now possible from source rock. As a result, the U.S. gas reserves are up 65% since the mid-1990s and still rising..."
New drilling techniques created in North America now are "borderless," he said, allowing operators to explore unconventional gas from tight sands and coal seams in dozens of countries.
"Consider the implications," said Mulva. "The world uses about 119 Tcf of gas a year. Recoverable conventional resources of 14,000 Tcf represent at least a 120-year supply. Adding the recoverable unconventional gas doubles that, to nearly 250 years; and even this could rise with new technology."
Thanks to "growing" liquefied natural gas transportation, "neither supplies nor users remain stranded any longer. Natural gas found almost anywhere can find markets and consuming countries can gain access to the gas they need."
Even without still-to-be-discovered remote gas in the deepwater and Arctic, "shale gas and other unconventional resources are transforming the energy market, leading us to conclude that natural gas can certainly ease today's energy security concerns..."
The Houston-based producer plans to spend 60% of its 2012 capital budget on North American projects, and most of them are in the onshore unconventional fields.
The company, which is readying a spinoff of its refinery operations to reemerge as the largest pure-play explorer in North America, is planning to spend $15.5 billion for its capital program next year and repurchase up to $10 billion more of its common stock.
About 90%, or $14 billion, of the 2012 capital program is to support exploration and production with 60% directed to North America projects. Next year's budget includes $2.2 billion for worldwide exploration.
The increase in U.S. and Canadian spending compared with prior years reflects "improved market conditions, with additional emphasis on liquids-rich resource plays and high-return investments," said Mulva.
"The 2012 capital program reflects our strategic emphasis on delivering value by investing in the most profitable opportunities. We expect competitive returns from our increased investments in sanctioned unconventional resource projects, such as our growing oilsands business in Canada, liquids-rich shale plays in the U.S. Lower 48" and a liquefied natural gas venture in Australia.
"As our production profile adjusts over time to reflect our increased levels of investment in liquids plays and lower levels in North American conventional natural gas, we expect to continue increasing margins in the upstream business."
ConocoPhillips' North American projects are varied. In the Lower 48 states capital funding is to be directed on the Eagle Ford Shale, as well as other liquids-rich plays in the Permian Basin and Bakken and Barnett shales. The program also funds ongoing development in the San Juan Basin as well as the company's contribution to the Marine Well Containment Co. in the offshore.
Spending in Canada is slated to be focused on existing steam-assisted gravity drainage oilsands projects and selective programs in Western Canada conventional basins, primarily on high-graded resource plays and to maintain a position for future development.
ConocoPhillips also remains committed to its plan begun in 2010 to sell $15-20 billion of assets through 2012. Through September the program has "yielded proceeds of $8 billion," it said. Recently announced agreements to sell the company's interests in two U.S. pipeline companies, along with other sales already closed in 4Q2011, are expected to increase the total to about $10.5 billion.