Posted June 8, 2015
North American Oil Production Flush with Increasing Efficiencies
Platts (The Barrel Blog) – When OPEC left production unchanged in November last year many understood it to be US or Canadian tight oil producers who would suffer, but thanks to technological advances — to paraphrase Mark Twain — the reports of the death of the tight boom have been greatly exaggerated.
After OPEC’s announcement of stable production, crude prices fell under $50/b, and the obituaries began to be written.
But lower prices forced companies to become hyper-vigilant on costs, and the result was the opposite of what may have been intended. US and Canadian production continued to grow, and E&P companies became leaner and more efficient — leading to a more competitive industry.
The savings from technological advances and more efficient internal processes, unlike the drop in rig dayrates that could rise again when the market turns, will be a more permanent feature of the North American oil market.
The numbers tell the story. The North American oil rig count dropped from its peak in early October at 1,609 to 646 for the week-ending May 29, yet productions is headed in the opposite direction — US oil output hit 9.586 million b/d, its highest daily rate since the EIA began weekly production reports in 1983. The EIA recently forecast another million b/d of oil production growth until it peaks in 2020 at 10.603 million b/d.
Read more: http://bit.ly/1FLTxtX
More industry news:
- Editorial – Innovation is Likely to Drive the Next U.S. Shale Boom: http://bit.ly/1FF3Dxw
- Fracking Study Undercuts Environmentalists’ Calls for Regulation: http://bloom.bg/1FLSXwm
- Sandpiper Pipeline Receives One of Two MN Permits for Construction: http://bit.ly/1KXdsOb
- Editorial – Dirty Rotten Ethanol Scoundrels (subscription req’d): http://on.wsj.com/1FLuUO4
- Blog – Where Is the Stimulus from Cheap Oil? http://bit.ly/1JzuIso
- Editorial Boards Support Crude Oil Exports: http://bit.ly/1HiIzS1
ABOUT THE AUTHOR
Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Mark also was a reporter, copy editor and sports editor. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela live in Occoquan, Va., where they enjoy their four grandchildren.