The rise in oil prices over the past six months has come as a blessing for the battered U.S. shale producers. Oil prices have risen more than 50 percent since January, giving a glimmer of hope to the U.S. oil industry that the worst of the oil crisis might finally be behind them. Moreover, it forced the shale producers to adapt by reducing production costs and increasing efficiency.
According to data publicized by Reuters, the decline rates of oil wells in the most productive fields in the U.S. – the Permian and Bakken Basins – were almost halved over the past several years. In practice, this means that shale people will get more bang for their buck; due to slower decline of the wells, they will have to drill fewer new wells to sustain output and therefore lower their capital demands.
After months of consecutive falls, the number of rigs has been increasing since May and companies expect additional growth if oil prices remain at $50 levels. In addition, Norwegian energy consultancy Rystad Energy’s newest estimates reveal that the U.S. holds more recoverable oil reserves than Russia or Saudi Arabia. More than 50 percent of reserves belong to unconventional shale oil.
No comments:
Post a Comment