Post by Ethan / JRyan on Apr 9, 2019 10:23:31 GMT -5
What a good article that explains what is going on in the Permian and its effect on the world and Oil and it's geopolitical ramifications.
Its not often that the NYT times has a good one but they did very well with this one imho.
How a ‘Monster’ Texas Oil Field Made the U.S. a Star in the World Market
The shale-drilling frenzy in the Permian has enabled the United States not only to reduce crude-oil imports, but even to become a major exporter for the first time in half a century. Its bounty has also empowered the United States diplomatically, allowing it to impose sanctions on Iran and Venezuela without worrying much about increasing gasoline prices. Mounting Texas crude exports have pressured global oil prices down, and are a major reason that Russia and Saudi Arabia recently cut their own production to push oil prices back up.
“OPEC producers never thought the Permian could be the next star world producer,” said René Ortiz of Ecuador, a former secretary-general of the Organization of Petroleum Exporting Countries. “They never thought one field — one, and not a country — could actually be the monster field of their imaginations.”
“OPEC producers never thought the Permian could be the next star world producer,” said René Ortiz of Ecuador, a former secretary-general of the Organization of Petroleum Exporting Countries. “They never thought one field — one, and not a country — could actually be the monster field of their imaginations.”
All told, domestic oil production increased by two million barrels a day last year, for a record of 11.9 million barrels, making the United States the world’s top producer.
Permian production has quadrupled over the last eight years, in contrast with the decline of most other established oil fields, for several reasons.
Companies found ways to lower exploration and production costs in tapping the Permian’s accommodating shale. New technologies for drilling and hydraulic fracturing helped bring the break-even price for the best wells from over $60 a barrel to as low as $33.
The Permian, as vast as South Dakota, is distinct from other shale fields because of its enormous size, the thickness of its multiple shale layers — some as fat as 1,000 feet — and its proximity to refineries on the Gulf of Mexico. Some shale fields produce too much natural gas, which is worth less than oil. Others have uneven layers of rock difficult to drill through. The Permian is rich in oil, and its shales are relatively easy to tap with today’s rigs.
Permian production has quadrupled over the last eight years, in contrast with the decline of most other established oil fields, for several reasons.
Companies found ways to lower exploration and production costs in tapping the Permian’s accommodating shale. New technologies for drilling and hydraulic fracturing helped bring the break-even price for the best wells from over $60 a barrel to as low as $33.
The Permian, as vast as South Dakota, is distinct from other shale fields because of its enormous size, the thickness of its multiple shale layers — some as fat as 1,000 feet — and its proximity to refineries on the Gulf of Mexico. Some shale fields produce too much natural gas, which is worth less than oil. Others have uneven layers of rock difficult to drill through. The Permian is rich in oil, and its shales are relatively easy to tap with today’s rigs.
“OPEC changed the price of poker and the Permian had the best hand,” said Dale Redman, chief executive of ProPetro, one of the basin’s biggest fracking service companies. “They unleashed our creativity. They forced us to do things better and cheaper.”