WASHINGTON, April 11 (Reuters) - A shale rock formation that stretches across Montana and North Dakota could hold about 3.7 billion barrels of oil, the biggest single deposit in the United States except for Alaska, the U.S. Geological Survey said this week.
The new USGS study shows the biggest contiguous oil deposit in the Bakken Shale formation, located in the Williston Basin, which extends from the U.S.-Canada border down into Montana and the Dakotas.
The last time the USGS assessed the area in 1995, it found 151 million barrels of technically recoverable oil, but drilling technology advances allowed the 25-fold increase in its potential, said U.S. Sen. Byron Dorgan, the North Dakota Democrat who requested the study.
"The substantial amount of oil that it estimates is in the Bakken Shale should attract significant new investment to this region," Dorgan said.
The Bakken Shale, comprised of thin layers of rock about two miles down, holds about 3.65 billion barrels of technically recoverable oil, the USGS said. The Arctic National Wildlife Refuge (ANWR) in Alaska could hold more than 10 billion barrels of oil.
But while ANWR is off-limits due to a congressional drilling moratorium, Marathon Oil Corp, EOG Resources Inc and Continental Resources Inc are among the companies already producing oil in the Bakken Shale.
The area could also hold 1.85 trillion cubic feet of natural gas and 148 million barrels of natural gas liquids, the USGS said.
As early as 2000 there was virtually no oil and gas produced from the Bakken Shale because of its complex geology, but it now accounts for half of Montana's oil production, thanks to high-tech advances like horizontal drilling. The area has turned North Dakota into the No. 8 U.S. oil producer.
As production in conventional oilfields declines, U.S. energy companies are turning to shale formations, where hydrocarbons are trapped in layers of rock.