New Mexico’s Record Oil Output To Generate $3.5 Billion Budget Surplus

New Mexico's Record Oil Output To Generate $3.5 Billion Budget Surplus

A record-high crude oil production in New Mexico this year is expected to boost the state's income for its general fund, leaving it with a $3.5-billion surplus for the fiscal year between July 2024 and June 2025 compared to current spending obligations.

That's the forecast of New Mexico's Finance and Administration Department and other state agencies, which have released their preliminary estimates for the state's finances for 2024-2025. Those estimates would serve as a basis for the budget negotiations at the Legislature set to begin in early 2024.  

"We are living in unprecedented and historical times in the state of New Mexico," Wayne Propst, secretary of the state Finance and Administration Department, told Associated Press' Morgan Lee.  

New Mexico, home to part of the Permian basin, saw the highest crude oil production growth of any U.S. state last year, with output gains of 300,000 barrels per day (bpd) accounting for half of America's oil production increase, the Energy Information Administration (EIA) said in a report earlier this year.

Total U.S. crude oil production increased by 600,000 bpd in 2022 compared with 2021, averaging 11.9 million bpd, per EIA's data. Crude oil production in New Mexico jumped by 300,000 bpd to 1.6 million bpd in 2022, a record for the state, the EIA has estimated.

For the third year in a row, New Mexico's oil production growth in 2022 eclipsed the growth of crude output in any other U.S. state, including Texas, the biggest U.S. oil-producing state and also home to part of the Permian shale basin.

New Mexico and Texas contributed the most growth to U.S. crude oil production in 2022, while oil output in the rest of the United States grew by just 0.6% last year, or by 33,000 bpd.

This year, New Mexico's crude oil production has been scaling new highs, EIA data shows.    

By Charles Kennedy for Oilprice.com

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