The Permian Basin pumped an estimated 815 million barrels of crude this year, beating its previous record of 790 million barrels, achieved back in 1973, IHS Markit reported. The figures once again reinforce the Permian’s status as the star of the U.S. shale patch and the main threat to OPEC’s efforts to reduce global oil production in a bid to prop up prices.
With so many reports about the Permian’s recent glory it’s easy to forget that the play is actually a mature one and in the past it has been written off as depleted. Instead, it has become the main driver of the overall oil production increase in the United States that has turned it into the main challenger to OPEC’s global oil industry dominance.
Over the past decade, IHS Markit figures show, the Permian has added almost 2 million barrels to daily production and by the end of this year it will be producing 2.75 million barrels daily, IHS market estimates suggest. This will boost total U.S. oil production to more than 10.5 million barrels by the end of next year, IHS’ director of energy research and analysis, Reed Olmstead, said. This would be an all-time high for the world’s top consumer of the commodity. Related: Goldman: Oil Markets To Balance Sooner Than Expected
The Houston Chronicle recalls that the Permian’s star first rose in the 1920s and since then, total production has reached more than 39 billion barrels of crude. Yet for decades, drillers only developed conventional oil fields in the area, and production from these started declining steadily in the 1970s as demand boomed.
It was only thanks to fracking that the Permian went back on the map of promising oil-producing areas and, according to IHS, it still contains some 70 billion barrels of technically recoverable oil. This amount could actually increase as fracking technology advances further, enabling drillers to tap previously unrecoverable reserves of crude oil.
By Irina Slav for Oilprice.com
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