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Current location:HOME>> News>> Industry News>> US tight-oil output may rise quickly with prices
US tight-oil output may rise quickly with prices
AUTHOR:admin PUBLISHED:2016-11-15 CLICK:正在读取

US tight-oil output production from tight shale formations could climb quickly as prices recover, but the emphasis likely will be more on short-term onshore projects that are easy to start than on longer-run offshore areas with greater potential, the International Energy Agency’s chief economist said.

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“The US tight-oil output industry could restart in a dynamic fashion if and when global oil prices improve. Companies are ready to go,” Laszlo Varro said at the Center for Strategic and International Studies on Oct. 25. “At the same time, I think it would be very difficult for any major US tight-oil output company to return to canceled offshore projects. The investment cost opportunities in North America primarily belong to short-term projects that are easy to start.”


Varro’s remarks centered on World Energy Investment 2016, the organization’s inaugural report on energy investments around the globe. It found that oil, the largest primary energy source, slightly increased its share of the global energy mix in 2015, but its share of global energy investment declined as the industry reacted to a sharp fall in prices since late 2014 with cuts in capital expenditures, most notably in North America.


“We are tracking the US tight-oil output industry in great detail. Luckily, most of the companies make a good quantity of data available,” Varro said. “US tight-oil output production has been declining for more than a year, and is close to 1 million b/d below its peak. But it has the capability to rapidly recover as prices increase.”


Investments in giant oil and gas projects also are relatively easy to track, he added. “In most cases, those technically haven’t been cancelled but delayed so the companies maintain the license and say they’ll revisit the project if and when market conditions justify it and, in any case, the US tight-oil output isn’t going anywhere,” said Varro. Companies also are applying efficiencies to reduce massive projects’ costs, such as BP PLC, which now estimates that its Mad Dog project that it originally said would cost $22 billion now can come in around $8 billion, he indicated.


“What is extremely difficult to track is the impact of ongoing investment cuts on secondary field development, such as infill drilling,” said Varro. “That has been cut to the bone. That is very likely to have an impact on depletion of existing US tight-oil output production, but it’s still extremely difficult to track.”

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