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Julianne Geiger

Julianne Geiger

Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.

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Permian On Track To Become Largest Oil Basin In The World

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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  • Mamdouh G Salameh on April 25 2018 said:
    While the Permian Basin may be one of the largest in the world, it still lags far behind Saudi Arabia’s Ghawar oilfield in terms of production and reserves and this situation is not going to change in the foreseeable future.

    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
  • Danny Hangartner on April 25 2018 said:
    Without meaning any disrespect, as it's just their way of doing business, their calculations are usually pure hype and pure baloney. How many times have we researched any U.S.A. largest in the world reserves calculations only to find out that they were about 10% of their published estimates? It's likely Canadian oil they're claiming to be theirs.
  • Danny Hangartner on April 25 2018 said:
    With the EIA's previous estimates of the Eagleford and of the Bakken, the U.S.A. must have twice the oil as the rest of the world combined.
  • rk on April 25 2018 said:
    Mamdouh Salameh. Whilst I have no idea of the URR of the Permian Basin, your comments on Ghawar can not be correct. According to the World Giant Oil Data from the A.A.P.G.which I have ,Ghawar's URR was 106041 billion barrels and that included 31 BBOE being gas leaving a total recoverable oil of 75041 billion. Whilst it once pumped 5 milllion barrels per day I have seen it reported at below 2 million now. It had a URR of 11152 BBO as at September 2013 which would include gas so what it is now, who knows? Definitely not 75 billion. They have been pumping 15 million barrels of sea water per day into their fields so that doesn't indicate huge continuous reserves, Here is a linK showing 97 billion in 2003 but note Iraq at 41 BOE.
    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.

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