The federal Energy Information Administration (EIA) came out with its Short-Term Energy Outlook report in August. It forecasts the U.S. crude-oil production is set to break records with the Permian Basin in western Texas and eastern New Mexico making up more than half the growth to 2020.
The country’s crude oil will average 10.7 million barrels per day (b/d) this year and rise to 11.7 million b/d in 2019. If these predictions are reached, they will break the 1970 record of 9.6 million b/d.
The numbers for the Permian are expected to average 3.3 million b/d in 2018 and 3.9 million b/d in 2019. The administration added that “Although favorable geology combined with technological and operational improvements have contributed to the Permian region becoming one of the more economically favorable regions for crude oil production in the United States, recent pipeline capacity constraints have dampened wellhead prices for the region’s oil producers. Lower wellhead prices in the region are contributing to slower growth in Permian crude oil production in 2019 compared with 2018.”
It looks as if the Bakken region will set a record-high production in 2018, at 1.3 million b/d and jumping to 1.4 million b/d in next year. In discussing the Bakken, the EIA points out that while the region is “geographically large, spanning approximately 200,000 square miles in North Dakota and Montana, it contains fewer identified producing formations and is significantly more affected by winter weather than the Permian. The recent production growth in the Bakken has been supported by the removal of pipeline capacity constraints that affected the region before 2017.”
The ouput in Texas’ Eagle Ford is anticipated to increase by some 105,000 b/d from 2018 to 2019 and will average 1.5 million b/d. The Eagle Ford region is smaller with fewer productive formations and not as many opportunities to drill compared with the Permian. “However,” the EIA report said, “the Eagle Ford region does not have the same pipeline capacity constraints as the Permian region. EIA anticipates that producers may move away from the Permian in mid-to-late 2018 and in 2019 into the Eagle Ford while the Permian region pipeline transport is constrained.”
Niobrara and Anadarko regional production is expected to average 670,000 b/d and 550,000 b/d, respectively, in 2019. That drilling activity will likely increase in both regions through 2019, with a probable slowdown from 2017 and 2018.
EIA expects production in Alaska, where large-scale fracing began in 2017, to remain unchanged with 480,000 b/d in 2018 and 2019.
In non-shale areas, EIA predicts Federal Offshore Gulf of Mexico (GOM) output to rise by 158,000 b/d in 2019 to average 1.9 million b/d. The growth the EIA says, is the result of two new fields that went into production in 2017, 10 new fields starting up in 2018, and six other fields coming online in 2019. These 18 fields could contribute 480,000 b/d of the total 1.9 million b/d of GOM production in 2019.