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Oil production in the United States will grow by an average of 500,000 barrels per day this year, most of which will come from the prolific Permian Basin, the President of Oxy Energy Services at Occidental Petroleum Corp said today at CERAWeek, according to Reuters.
Frederick Forthuber, President of Oxy Energy Services, acknowledged that U.S. oil output has moderated and will remain slower as companies focus on shareholder returns while battling inflation.
Between 80% and 80% of this anticipated oil production increase will come from the Permian basin, Forthuber said.
The Energy Information Administration anticipates even higher production growth this year. In its latest STEO, the EIA has estimated that U.S. crude oil production will increase from 11.90 million bpd last year to 12.49 million bpd this year, for an increase of 590,000 bpd. A new STEO with potentially revised figures will be released later today.
U.S. crude oil production increased to an estimated 11.90 bpd in 2022 from 11.25 million bpd in 2021. If realized, it would be the largest single source of non-OPEC crude oil production growth this year—with most of that increase coming from the Permian.
For its part, Occidental Petroleum Corp is looking at a sizable increase in Permian Basin oil production, with a company-wide budget for capital expenditures of between $5.4 billion and $6.2 billion. In the Permian Basin specifically, Oxy has allocated between $2.3 billion and $2.6 billion to implement its plan to add 10 net drilling rigs on average, bringing 380-410 gross operated wells online.
Oxy expects its Permian output this year to average between 560,000 and 590,000 boepd.
The Permian has failed to increase at a suitable fast rate for the Biden Administration’s liking, although a recent Dallas Fed Survey revealed that the Permian’s maturing asset base was the second most important reason why production was growing at a faster clip.
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.