The crazy rate of production growth seen in US shale over the last five years is a thing of the past, Schlumberger CEO Olivier Le Peuch told Reuters on Tuesday on the sidelines of a conference in Saudi Arabia.
While shale production will continue to grow this year and in future years, the rate of growth will slow considerably, to 600,000 to 700,000 barrels per day this year, and even worse—to just 200,000 barrels per day in 2021, after which it will plateau, never to the previous rate of growth.
Unless, of course, there are significant developments in new technologies that will allow E&P companies in the United States to lower their costs, Le Peuch said.
This isn’t the first time that analysts and industry players have called the end to the rapid growth in US Shale that has forever changed the landscape of the global oil industry. And while most believe that US shale cannot possibly sustain the rapid rate of growth it has seen up until now, few agree on when, exactly, this rapid growth will slow to next to nothing.
Few analysts predicted that Saudi Arabia would still be taking the brunt of the OPEC cuts on itself, effectively subsidizing oil prices for the entire world—and it is precisely this subsidy that is allowing US shale to keep pumping more and more.
But Schlumberger sees this US Shale heyday ending soon, and is already preparing for tough times, after experiencing a strong Q4—but not in North America. Rather, its international business carried the oilfield services giant to better than expected profits. Determined to improve Schlumberger’s bottom line in North America, it cut 1,400 jobs since Q3 2019, and is looking to ditch underperforming businesses.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group. More