• 4 minutes Europeans and Americans are beginning to see the results of depending on renewables.
  • 7 minutes Is China Rising or Falling? Has it Enraged the World and Lost its Way? How is their Economy Doing?
  • 13 minutes NordStream2
  • 1 day Monday 9/13 - "High Natural Gas Prices Today Will Send U.S. Production Soaring Next Year" by Irina Slav
  • 12 hours California to ban gasoline for lawn mowers, chain saws, leaf blowers, off road equipment, etc.
  • 5 hours "Here is The Hidden $150 Trillion Agenda Behind The "Crusade" Against Climate Change" - Zero Hedge re: Bank of America REPORT
  • 3 hours "A Very Predictable Global Energy Crisis" by Irina Slav --- MUST READ
  • 3 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 1 day Two Good and Plausible Ideas about Saving Water and Redirecting it to Where it is Needed.
  • 2 days An Indian Opinion on What is Going on in China
  • 4 hours Can Technology Keep Coal Plants Alive and Well?
  • 1 day Succession Planning in Human Resources for Vaccinated Individuals in the Oil & Gas Industry
  • 3 days Perfect Energy Storm in Europe: turning our back on fossil fuels is easier said than done!
  • 2 hours Storage of gas cylinders
  • 3 days Nord Stream - US/German consultations
Why $80 Oil Won't Destroy Demand

Why $80 Oil Won't Destroy Demand

Global oil demand is recovering…

U.S. Shale Giant Says OPEC Controls Oil Prices

U.S. Shale Giant Says OPEC Controls Oil Prices

Unlike in previous years, the…

Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

More Info

Premium Content

Permian Drillers Prepare For Double-Digit Cost Jump

U.S. shale companies expect a double-digit cost increase in services across the oil patch, and the Permian in particular, as the industry recovered from the downturn and is now growing fast.

The Permian is the leader of U.S. oil production growth, and service costs in the most prolific shale play are set to continue to rise, shale companies and industry analysts expect, as drilling contractors, fracking crews, and frac sand, for example, are in high demand.

Oilfield service providers, who were hit hard during the slump, are now upbeat for the first time in three years, expecting a busy North American shale activity.  

U.S. oil production is already exceeding 10 million bpd – a level higher than Saudi Arabia’s current output, and the United States is expected to soon topple Russia as the world’s largest crude oil producer, possibly as early as later this year.

As the leading shale basin in the U.S., cost inflation is showing most prominently in the Permian.

Anadarko Petroleum Corporation, for example, expects service costs in its Permian operations to increase by between 10 percent and 15 percent, chief executive Al Walker said at the Scotia Howard Weil energy conference in New Orleans.

“We’re just going to see some natural creep in service costs that will just have to work its way into the system,” Walker said. “If oil prices rise higher, that will increase the pressure on prices.”

According to Westwood Global Energy Group, the supply chain in the U.S. onshore is stretched, and the market expects “double-digit” price increases this year.

Related: China's Oil Futures Launch With A Bang

The cost increase is expected to average around 15 percent, but in the proppant segment, the price inflation is significantly higher, Westwood said in January.

Commenting on upstream costs in the U.S. onshore, Wood Mackenzie said at the end of last year:

“The tension going forward will be between productivity gains (in our view, the greatest perhaps already realised) and resurgent cost inflation (still playing out).”  

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

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