The Permian Basin has long been touted as the fastest growing shale play in the United States, but now its oil-producing prowess is being highlighted again as the Energy Information Administration forecasts the prolific basin's May production to be 3.183 million bpd-an expected 73,000 bpd rise from April.
The Permian play may very well, as Bloomberg Markets suggests, become the largest oil patch in the world over the next decade.
If The Permian Was Part of OPEC
The United States is quickly become a major contender for top oil producer in the world, producing 10.540 million bpd as of week ending April 13. That's more than Saudi Arabia (9.934 million bpd as of the latest MMOR), and just a hair below that of the world's top producer, Russia, who produced 10.97 million bpd in March 2018, according to Russia's Energy Ministry.
Besides OPEC's powerhouse Saudi Arabia, the next largest OPEC producer is But the Permian alone, with its expected production of 3.183 million bpd next month Iraq at 4.426 million bpd, followed by Iran at 3.814 million bpd. If the Permian were part of OPEC, it would be its number three producer.
And unlike Iraq and Iran which have production quotas to contend with as part of their OPEC duties, for the Permian, the sky is the limit, constrained only by the size of its massive reserves. Even when prices were low, oil production increased in the Permian, increasing every month but three from January 2016 to March 2017, according to the EIA.
On top of the Permian's large reserves, technology has played a major role in helping the Permian achieve its high marks.
"The technology is the biggest driver," said Rob Thummel, managing director and Portfolio Manager - Energy at Tortoise, which handles $16 billion in energy-related assets. "The basin in and of itself could end up being the largest oil field in the world."
By Julianne Geiger for Oilprice.com
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Comments
If we accept the word of the EIA on the Permian production of 3.183 million barrels a day (mbd), it still lags behind Ghawar’s 5-mbd production. It also lags far behind Ghawar in terms of proven reserves and also far behind Iraq's giant oilfileds Rumailla, Karkuk and Majnoun oilfields.
According to Saudi Aramco, Ghawar still has remaining reserves of some 70 billion barrels (bb). The reported recoverable reserves of the Permian range from 10-14 bb subject to independent verification.
If the Permian was part of OPEC, it would rank sixth in terms of production behind Saudi Arabia, Iraq, UAE, Iran and Kuwait.
The claimed US oil production of 10.54 mbd includes an estimated 2 mbd of natural gas liquids (NGLs) which come from natural gas wells as well as such gases as ethane, propane, butane and pentanes which may not qualify as crude oil. The real question is whether natural gas plant liquids can be sold as oil on the world market. The answer is “No”. In fact, major oil exchanges accept neither natural gas plant liquids nor lease condensates as satisfactory delivery for crude oil. And if major exchanges don’t accept natural gas liquids as crude oil, then they are not crude oil.
Moreover, Saudi Arabia’s production would have been far higher if not for the huge cuts it has made to bolster the oil price under the OPEC/non-OPEC production cut agreement.
So the claim that the US is a major contender to the top oil producer in the world can be viewed as more of a wishful thinking that a reality.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London
www.searchanddiscovery.com/documents/gong03/index.htm Also Manifa was supposed to go off line taking away 900,000 BOPD because of huge corrosion issues. These articles by Bloomberg journalists show they only report the latest rumour.