United States oil production is set to grow over the next 5 years to more than 12.9 million b/d by 2030 from 10.96 million b/d at the beginning of 2021, according to GlobalData. The biggest growth is expected in the Permian basin, where crude oil and condensate supply is projected to increase by about 0.90 million b/d to 5.4 million b/d by the end of the outlook period from 4.5 million b/d in 2021, GlobalData continued.
According to a recent GlobalData report, US Lower 48 operators reached drilling and completion improvements in the past year that lowered breakeven price of unconventional projects to as low as $35/bbl, marking a possible shale production rebound to pre-pandemic levels by 2024.
“Despite the significant increase in oil prices, operators have been quite prudent in their capital spending and started building their strategies around high-return core assets. As a result, total rig count in the US has been quite sluggish in response to an increase in WTI price and is still at 63% level compared to the number of rigs before the pandemic started,” said Svetlana Doh, oil and gas analyst, GlobalData.
The US oil and gas rig count has been growing steadily in first-half 2021, she said, but it is down by 29% annually. “An average of 327 rigs were active across the US shale plays during [first-half] 2021, which is 132 rigs lower compared to [first-half] 2020. However, the recent oil price recovery has facilitated the improvement in rig activity and in January, 332 rigs were operational across major shale plays, which increased to 418 in June 2021,” she said.
“Future production in the US Lower 48 is also likely to be affected by the fact that President Biden’s administration will try to constrain leasing on the federal land, even though the drilling freeze was lifted by the court’s ruling earlier this year,” Doh said.
“Such a measure is making the process of leasing time consuming, and this alone could hurt operators with significant acreage on federal land in the long run. However, the overall effect on production is not expected to be immediate. Operators have been stocking up drilling permits in advance, and secondly, drilling will still be allowed on active but not expired federal leases,” she concluded.