• 15 mins EIA Weekly Inventory Data Due Wednesday, Despite Govt. Shutdown
  • 4 hours Oklahoma Rig Explodes, Leaving Five Missing
  • 6 hours Lloyd’s Sees No Room For Coal In New Investment Strategy
  • 9 hours Gunmen Kidnap Nigerian Oil Workers In Oil-Rich Delta Area
  • 11 hours Libya’s NOC Restarts Oil Fields
  • 13 hours US Orion To Develop Gas Field In Iraq
  • 3 days U.S. On Track To Unseat Saudi Arabia As No.2 Oil Producer In the World
  • 3 days Senior Interior Dept. Official Says Florida Still On Trump’s Draft Drilling Plan
  • 3 days Schlumberger Optimistic In 2018 For Oilfield Services Businesses
  • 3 days Only 1/3 Of Oil Patch Jobs To Return To Canada After Downturn Ends
  • 3 days Statoil, YPF Finalize Joint Vaca Muerta Development Deal
  • 3 days TransCanada Boasts Long-Term Commitments For Keystone XL
  • 4 days Nigeria Files Suit Against JP Morgan Over Oil Field Sale
  • 4 days Chinese Oil Ships Found Violating UN Sanctions On North Korea
  • 4 days Oil Slick From Iranian Tanker Explosion Is Now The Size Of Paris
  • 4 days Nigeria Approves Petroleum Industry Bill After 17 Long Years
  • 4 days Venezuelan Output Drops To 28-Year Low In 2017
  • 4 days OPEC Revises Up Non-OPEC Production Estimates For 2018
  • 4 days Iraq Ready To Sign Deal With BP For Kirkuk Fields
  • 5 days Kinder Morgan Delays Trans Mountain Launch Again
  • 5 days Shell Inks Another Solar Deal
  • 5 days API Reports Seventh Large Crude Draw In Seven Weeks
  • 5 days Maduro’s Advisors Recommend Selling Petro At Steep 60% Discount
  • 5 days EIA: Shale Oil Output To Rise By 1.8 Million Bpd Through Q1 2019
  • 5 days IEA: Don’t Expect Much Oil From Arctic National Wildlife Refuge Before 2030
  • 5 days Minister Says Norway Must Prepare For Arctic Oil Race With Russia
  • 5 days Eight Years Late—UK Hinkley Point C To Be In Service By 2025
  • 5 days Sunk Iranian Oil Tanker Leave Behind Two Slicks
  • 6 days Saudi Arabia Shuns UBS, BofA As Aramco IPO Coordinators
  • 6 days WCS-WTI Spread Narrows As Exports-By-Rail Pick Up
  • 6 days Norway Grants Record 75 New Offshore Exploration Leases
  • 6 days China’s Growing Appetite For Renewables
  • 6 days Chevron To Resume Drilling In Kurdistan
  • 6 days India Boosts Oil, Gas Resource Estimate Ahead Of Bidding Round
  • 6 days India’s Reliance Boosts Export Refinery Capacity By 30%
  • 7 days Nigeria Among Worst Performers In Electricity Supply
  • 7 days ELN Attacks Another Colombian Pipeline As Ceasefire Ceases
  • 7 days Shell Buys 43.8% Stake In Silicon Ranch Solar
  • 7 days Saudis To Award Nuclear Power Contracts In December
  • 7 days Shell Approves Its First North Sea Oil Project In Six Years
Alt Text

China Looks To Increase Oil Imports

As China’s domestic oil demand…

Alt Text

OPEC Oil Production Falls In December

OPEC’s oil production fell in…

Alt Text

Can We Afford Renewable Energy?

Renewable energy is all the…

Gregory Brew

Gregory Brew

Gregory Brew is a researcher and analyst based in Washington D.C. He is currently pursuing a PhD at Georgetown University in oil history and American…

More Info

Has The Long Awaited Recovery Of Texan Oil Started?

Texas Oil

Some positive signs indicate the long-awaited recovery in the Texas oil and gas industry may finally be on the way. But the climb back out of the hole dug since the price collapsed from over $100 in July 2014 to the $30 lows of January-February 2016 will be slow, and full recovery could take years, if it happens at all.

Texas crude oil production in 2016 increased in August by 0.5 percent from last year, to 2.4 million barrels a day, according to the Railroad Commission of Texas. Total crude and condensate production for August was 2.7 million barrels a day.

After years of lay-offs leading to a partial collapse of the Houston housing market and other economic woes, industry experts see employment prospects in Texas improving. The Texas Workforce Commission reported that two-hundred and fourteen thousand Texans worked in the upstream sector as of September 2016. The figure marks a significant decline from two years ago, but also indicates that upstream hiring is picking back up.

Schlumberger, the ailing services company, announced last week modest third quarter profits and together with Halliburton announced that layoffs had ceased as of June 2016. Together the two companies axed 85,000 jobs in eighteen months. Total lay-offs in Texas topped out at over 350,000 in May 2016.

Activity in the Permian Basin, the large west Texas shale play that is currently the locus of the national shale oil and gas boom, continues to be robust. Drilling rigs are being added more quickly in the Permian than elsewhere, with the EIA’s albeit confusing figures for October showing production there growing steadily, in marked contrast to the decline being experienced by other shale plays. M&A activity is strong, with thirteen publicly announced transactions in the second quarter among Permian upstream participants, with an average value of $17,000/acre. Related: The Beginning Of The End For Europe’s Natural Gas War

Access to capital in the Permian is much better than it elsewhere, which is leading to a lopsided recovery. While upstream activity in shale has proven robust, offshore production and investment is lagging behind. FMC Technologies, an offshore equipment company, announced a further one thousand layoffs and declining profits even as Schlumberger reported its modest gains for the quarter. The company has cut 5200 jobs since 2014 and will likely announce further cuts at the end of the year.

This is no surprise; recovery in offshore is always much slower than among onshore producers. But it speaks to the continued vitality of fields like the West Texas Permian.

Overall, the picture for Texas, the center of the American oil and gas industry, remains grim. ConocoPhillips, a huge American producer, announced third quarter losses of $1 billion, down from $1.1 billion losses this time last year. The company has cut about $300 million in capital expense as its shifts from offshore to shale, and cut another $300 million in operating costs. Despite the losses, the company’s share price ticked upwards on the news, indicating some confidence that the tough times are largely behind it. Related: Iran’s Crude Exports To Fall Of A Cliff In November

Baker Hughes, another large services company and a distant third behind Halliburton and Schlumberger, cut another two thousand jobs in the third quarter as it moved to reduce costs. So far it’s cut about $500 million, and its goal is to reach $650 million in savings by the end of the year. The company’s losses for the third quarter were $429 million, compared to a $911 million loss last year. It’s payroll has been practically cut in half since 2014, from sixty-two to thirty-four thousand employees, though in September it cut employee pay as a way to avoid further reductions in staff.

The simplest reason for the slow recovery is the recent uptick in prices beyond $50. Higher prices and the recent moves by companies to stall collapsing profits, cut losses, shed employees and increase savings has given the industry greater confidence that the worst is behind them. But it’s not time to celebrate quite yet. Prices could still fall amidst the on-going supply glut; moves by OPEC or other international producers could send the market down again; things could get worse before they get better.

By Gregory Brew for Oilprice.com

More Top Reads From Oilprice.com:




Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News