• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 8 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 10 hours How Far Have We Really Gotten With Alternative Energy
  • 8 days They pay YOU to TAKE Natural Gas
  • 5 days What fool thought this was a good idea...
  • 8 days Why does this keep coming up? (The Renewable Energy Land Rush Could Threaten Food Security)
  • 3 days A question...
  • 14 days The United States produced more crude oil than any nation, at any time.
Caspian Power Trio Aims to Electrify the European Union

Caspian Power Trio Aims to Electrify the European Union

Azerbaijan, Kazakhstan, and Uzbekistan plan…

Millennials Drive EV Adoption in the U.S.

Millennials Drive EV Adoption in the U.S.

A recent survey from Statista's…

Charles Kennedy

Charles Kennedy

Charles is a writer for Oilprice.com

More Info

Premium Content

Oil Majors Expect Permian Production Growth To Slow

  • In their third-quarter reports, both Chevron and Exxon revised down their planned output from the Permian Basin.
  • Both companies reported record production in the third quarter, but they believe supply chain issues and a workforce shortage will slow growth.
  • As inflation rises and the number of drilled but uncompleted wells falls, production growth across the country will face headwinds
Production

Two Big Oil majors have said they expect oil production in the Permian to rise by less than they had initially planned this year, suggesting industry problems are indeed serious enough to hold back production growth in the most prolific shale play in the United States.

In their third-quarter reports, Chevron and Exxon both revised down their planned output from the Permian, although moderately. Chevron said its Permian output had hit a record high in the quarter that just ended, at 700,000 bpd. Exxon also posted record production in the Permian, at 560,000 bpd for the third quarter.

Yet these figures are unlikely to change much for the rest of the year, due to the ongoing supply chain challenges in the industry and a continued workforce shortage, analysts have noted.

Oilfield services are also becoming more expensive as overall inflation spills everywhere but also as demand for their services increases amid the tight oil supply context. This has given the OFS sector more power over pricing which is not good news for their clients.

The Permian remains the star of the shale patch, with production expected to hit another record next month, at 5.453 million bpd, according to the U.S. Energy Information Administration.

Yet the statements by Exxon and Chevron add to concern that production growth even in the Permian is slowing down. The other indication that this may be the case is the declining number of drilled but uncompleted wells in the play. As of September, the number of DUCs across the U.S. stood at 4,333, which was the lowest since late 2013.

The decline was in big part the result of a surge in completions after the end of pandemic restrictions when demand for oil began to rebound fast. Yet new drilling was nowhere near pre-pandemic levels, so both DUCs and new well drilling declined, constraining production growth.

By Charles Kennedy for Oilprice.com

ADVERTISEMENT

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment
  • Mamdouh Salameh on October 31 2022 said:
    There is no surprise here since US shale oil is a spent force. This means that US crude oil imports are on the increase exceeding 9.0 million barrels a day (mbd) this year and the following years.

    It means also that the US Department of Energy (DoE) will find it virtually impossible to refill its SPR neither from purchases from shale oil production nor from a tight global oil market where there is no oil to spare.

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News