California's Monterey Oil Deposits Seen at 21 mln bbls

Unconventional oil and gas deposits in deeper portions of California's Monterey formation may not be as prolific as once estimated, the U.S. Geological Survey said on Tuesday.

A new study by the agency estimated that 21 million barrels of oil and 27 billion cubic feet of gas can be recovered from the Monterey shale in the San Joaquin Basin using existing technology for hydraulic fracturing.

Though the Monterey shale was once seen as holding great promise for unconventional oil extracted by fracking, the latest volume estimates were relatively small compared with previous studies of the area's conventional resources.

In 2003, the organization released a study of conventional oil and gas potential in the San Joaquin Basin that estimated 121 million barrels of recoverable oil. A later study by the USGS in 2012 found that increasing recovery from existing fields could add 3 billion barrels of oil to its reserves.

California pumped 544,000 barrels of oil per day in July of this year, making it the third-largest oil producing state in the U.S. after Texas and North Dakota, according to the latest data from the Energy Information Administration (EIA).

The Monterey formation is source rock for oil in the San Joaquin Basin central California.

(Reporting By Edward McAllister and Liz Hampton)