The state of Texas now has even more bragging rights in the U.S. Oil
Patch, and even globally According to a new report from the Texas Independent Producers Royalty Owners Association,
the Lone Star state’s oil production hit a record level not seen since
1973, the same year of the Arab oil embargo that roiled global oil
markets.
Texas oil wells produced more than 1.54 billion barrels of crude in 2018,
topping the previous record of 1.28 billion barrels set in 1973, TIPRO
reported in its annual "State of Energy Report.” Natural gas production
also grew, reaching 8.8 trillion cubic feet (tcf) last year. In 2017,
Texas also came close to beating the 1973 oil output record, pumping
1.26 billion barrels of oil.
To put Texas oil production in
perspective, if it were a country, it would be the world's third oil
producer sometime this year, behind only Russia and Saudi Arabia, HSBC
said in a report. The main engine of Texas oil output is the Permian
basin that spans West Texas and southeastern New Mexico and is one of
the most prolific oil and gas producing regions in the U.S. The Permian
Basin is approximately 250 miles wide and 300 miles long, across West
Texas and southeastern New Mexico. It encompasses several sub-basins,
including the Delaware Basin and the Midland Basin.
U.S. production revolutionizes global oil markets
Record-breaking
U.S. oil production is expected to continue for decades, driven largely
by the Permian Basin, the U.S. Energy Information Administration (EIA) said in its Annual Energy Outlook
two weeks ago. In the outlook's reference case, the EIA forecasts U.S.
oil output, which averaged 10.93 million b/d in 2018, to climb to nearly
15 million b/d by 2027 before flattening out and falling below 12
million b/d by 2050. Shale production in the Lower 48 states will
account for nearly 70 percent of domestic production over the next three
decades, according to the report. The majority of the growth will take
place in the Permian, according to Meg Coleman, leader of EIA's
exploration and production team.
The EIA also projected that the U.S. will become a net energy
exporter in 2020 and remain so through at least 2050, due largely to a
rapid growth of domestic crude, gas and natural gas liquids (NGLs)
output and a slowdown in US consumption growth.
U.S. oil
production has changed global oil markets over the last several years,
catching both global oil players and Russia and a Saudi-led OPEC
off-guard. U.S. production was largely responsible for an oil glut in
late 2014 that saw Saudi Arabia change course and instead of cutting
back production to support prices that were its standard policy for
decades, it actually ramped up production to not only drive U.S. shale
producers out of business but to guard its market share. However, the
plan backfired, almost driving the kingdom into a financial tailspin,
and saw oil prices plunge from around $100 per barrel in mid-2014 to
just under $30 per barrel in Jan. 2016. In essence, it was U.S oil
output that forced Saudi Arabia to reach out to Russia and other
non-OPEC players and form the so-called OPEC+ group of producers to try
to take back control of global oil markets.
Going forward, U.S.
oil production will still cause havoc for OPEC+ as the group makes good
on its recent deal to trim oil output. Other factors, including the loss
of both Iranian and Venezuelan barrels, the outcome of U.S.-China trade
talks, and economic growth also come into play. Finally, what Saudi
Arabia could for decades, play the part of global oil markets swing
producer, it now has to do with Russian help and at the end of the day,
U.S. production, albeit driven by Texas production, is the reason why.
By Tim Daiss for Oilprice.com
No comments:
Post a Comment