BP reported a surprise increase in oil production from aging fields that, according to chief executive Robert Dudley, he hadn’t seen in his close to four-decade career in the industry.
BP reported a 12-percent increase in oil production last year, to the highest level since 2010.
In an interview with Bloomberg on the sidelines of CERAWeek, Dudley said “I cannot remember ever in my career having seen a negative decline rate.” And BP is not alone, either, Bloomberg’s Javier Blas notes. Norwegian oil companies and Shell have also reported better production results from their mature fields.
While for the companies operating these fields should pat themselves on the back, it is a new problem for OPEC, which is currently focusing on U.S. shale as its main problem in keeping prices high.
Data from the International Energy Agency reveals that the phenomenon is not limited to a couple of supermajors, either. Last year, the agency said, oil production from legacy fields worldwide declined by a more modest pace, of less than 6 percent, compared with 7.5 percent a year earlier.
Analysts and industry insiders agree that this is a result of the 2014 price collapse that made everyone from the smallest independent to the supermajors much more careful with their spending. Related: 44 Things You Didn’t Know About Oil
Shell’s head of deepwater operations, Wael Sawan, told Blas that “Companies are focusing on the basics. So there was a massive re-focus on existing wells. It’s the cheapest and most profitable barrel that companies can access.”
Even with this good news not everyone agrees that Big Oil will repeat its strong performance from 2017 this year. As per the IEA, mature fields accounted for 51 million barrels of global daily production in 2017. In comparison, new conventional fields where production is yet to reach its peak, accounted for much less – just 16 million bpd. That’s almost half the contribution of shale and oil sands, which stood at 30 million bpd last year.
By Irina Slav for Oilprice.com
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