• 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
  • 46 mins GREEN NEW DEAL = BLIZZARD OF LIES
  • 7 days If hydrogen is the answer, you're asking the wrong question
  • 19 hours How Far Have We Really Gotten With Alternative Energy
  • 11 days Biden's $2 trillion Plan for Insfrastructure and Jobs

Breaking News:

Oil Prices Gain 2% on Tightening Supply

The Race to Mine the Ocean is Heating Up

The Race to Mine the Ocean is Heating Up

India has applied for two…

Dallas Fed: Surging Costs Hamper U.S. Shale Growth

The business activity index in the energy firms operating in Texas, northern Louisiana, and southern New Mexico jumped in the second quarter to the highest level in six years, but costs continue to escalate and supply chain delays are worsening, the Dallas Fed Energy Survey showed on Thursday.  

Activity in the oil and gas sector in the most prolific U.S. shale basin, the Permian, expanded at a robust pace in the second quarter, with the business activity index—the survey’s broadest measure of conditions facing energy firms—up from 56.0 in the first quarter to 57.7, registering its highest reading in the survey’s six-year history, the Dallas Fed said.

For a sixth quarter in a row, costs have risen this quarter, according to the survey of oil and gas executives at 85 exploration and production firms and 52 oilfield services firms.

The index for input costs at the oilfield services companies jumped to a record high, and none of those firms responding in the survey reported lower costs. 

Delivery times for materials and equipment for the industry are rising, with many executives reporting significant delays.

Nearly half of the executives—47 percent—said supply-chain issues have a “significantly negative” impact on their firms, and another 47 percent see slightly negative impact. Just 6 percent of executives said their firms are experiencing no supply-chain issues or impacts. Moreover, most executives – or 66 percent – expect it will take more than a year to resolve supply-chain issues.

In comments to the survey, an E&P executive said “We are experiencing significant delays in obtaining materials and services, and costs are substantially increasing. We will shortly be ceasing investment in any new operations owing to the combination of rising costs, supply-chain slowness and our view that a recession is coming that will drop oil and natural gas prices significantly.”

“Huge service cost increases, regulatory uncertainty and mixed messages from Washington are keeping me on the sidelines,” another executive noted.

ADVERTISEMENT

One executive at an oilfield service firm commented: “The supply chain seems stretched to the max in the Permian Basin. There really is not much ability to increase drilling activity.”

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage



Leave a comment

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