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The growth of the U.S. oil and gas industry in 2022 will come from smaller companies and private businesses
10/07/2021
The U.S. is expected to see an increase in oil production thanks to little-known private companies that are unaffected by stock market pressures. By 2022, oil output is expected to grow by 800,000 bbl/d, increasing sharply from this year and making the U.S. the fastest-growing oil producer outside of the OPEC cartel.
Surprisingly, the rise is not being driven by major oil companies. More than half of total U.S. output growth next year will come from privately-held producers, versus regularly expected 20%.
Currently, oil prices are hovering around $70/bbl, which makes most shale wells profitable to drill. Yet, despite huge losses resulting from the pandemic as well as unsustainable drilling rampage, the majority of leading oil companies have promised their shareholders to limit the amount they spend on growth for now. In contrast, private companies decided to bite the bullet, and have been leading the rise in oil and gas rigs drilling in the U.S. this year, which has more than doubled over from past September.
The onset of the Coronavirus pandemic of late 2019 dethroned the American oil industry from the leading position — which it got thanks to active shale field development — by forcing States to slow production from a peak of about 13 million barrels/day in late 2019 to about 11.1 million barrels/day by the end of 2020 due to low oil prices and falling demand.
Nevertheless, increasing crude oil production is now on the government agenda after the impact of Hurricane Ida, and expects production to reach 12.2 million barrels/day by the end of 2022. It is projected that drilling and bringing new oil wells online will grow more than $15 billion in one year.
In times of tight oil supplies, U.S. growth will impact world oil market balances. Currently, OPEC+ nations alone have been bringing about 400,000 bbl/d of new production volumes to the market each month in response to the unprecedented cuts last year.
Bank of America also expects to see new supplies from the United States of about 800,000 barrels per day in 2022 in a bid to ease supply concerns. And even with a strong comeback from the U.S., crude prices should still hold well above $70/bbl next year and could, potentially, even jump as high as $100/bbl.
Despite these prospects, many leading oil companies still decided to bow down to their shareholders, putting profits overproduction increases.
Although the oil and gas sector has been on a decline for the past couple of years, changes in the public’s perception of the industry might not be too far away. A recent rise in oil prices is being accompanied by a continued level of capital discipline from producers, which could lead to a healthier reputation for the sector.
At Rextag we also expect to see some fairly major shifts in perception, in line with the way other sectors dealt with shifts in business models.
If you are looking for more information about energy companies, their assets, and energy deals, please, contact our sales office mapping@hartenergy.com, Tel. 619-349-4970 or SCHEDULE A DEMO to learn how Rextag can help you leverage energy data for your business.
Williston Basin Overview: 2022 vs 2023, Bakken Shale, Operators, Deals, 2024 Update
The Williston Basin is a big area filled with layers of rock that sits next to the Rocky Mountains in western North Dakota, eastern Montana, and the southern part of Saskatchewan in Canada. This area covers roughly 110,000 square miles. Geologically, it's very similar to the Alberta Basin in Canada. People started drilling for oil in the Williston Basin back in 1936, and by 1954, most of the land where oil could likely be found was already claimed for drilling. The Bakken Formation with parts of Montana, North Dakota, Saskatchewan, and Manitoba has become one of only ten oil fields globally to yield over 1 million barrels per day (bpd) since the late 2000s. It is currently the third-largest U.S. shale oilfield, behind the Permian and Eagle Ford. The boom in the Bakken started around September 2008, coinciding with the U.S. housing market crash. The application of new technologies, such as swell packers enabling multiple-stage fracturing, significantly enhanced oil recovery, making the Bakken Formation a key player in the U.S. In 2022, the Bakken oil field saw big improvements in how much oil and gas it could produce. At the start of the year, 27 drilling rigs were working there, more than double the 11 rigs from the start of 2021. Important upgrades included making the Tioga Gas Plant able to process 150 million cubic feet more gas each day, and making the Dakota Access Pipeline bigger, increasing its oil transport capacity from 570,000 to 750,000 barrels every day.
3D visualization for Oil & Gas industry: leaders of the O&G market in 2022
3D Modeling helps to optimize oil and gas exploration and production, and evaluate the potential of energy sources. Companies CGG, ESA, Schneider Digital, and Continental Resources have been pioneering in 3D visualization for the O&G industry in 2022.
The Williston Basin is a big area filled with layers of rock that sits next to the Rocky Mountains in western North Dakota, eastern Montana, and the southern part of Saskatchewan in Canada. This area covers roughly 110,000 square miles. Geologically, it's very similar to the Alberta Basin in Canada. People started drilling for oil in the Williston Basin back in 1936, and by 1954, most of the land where oil could likely be found was already claimed for drilling. The Bakken Formation with parts of Montana, North Dakota, Saskatchewan, and Manitoba has become one of only ten oil fields globally to yield over 1 million barrels per day (bpd) since the late 2000s. It is currently the third-largest U.S. shale oilfield, behind the Permian and Eagle Ford. The boom in the Bakken started around September 2008, coinciding with the U.S. housing market crash. The application of new technologies, such as swell packers enabling multiple-stage fracturing, significantly enhanced oil recovery, making the Bakken Formation a key player in the U.S. In 2022, the Bakken oil field saw big improvements in how much oil and gas it could produce. At the start of the year, 27 drilling rigs were working there, more than double the 11 rigs from the start of 2021. Important upgrades included making the Tioga Gas Plant able to process 150 million cubic feet more gas each day, and making the Dakota Access Pipeline bigger, increasing its oil transport capacity from 570,000 to 750,000 barrels every day.
Continental Resources is expanding its operations in the Midland Basin, including taking over some assets that used to belong to Occidental Petroleum. The company plans to use its expertise in exploration in this area.
Equinor and EQT Corporation have agreed that Equinor will exchange its operated assets in the Marcellus and Utica shale formations in Ohio for a stake in EQT’s non-operated interests in the Northern Marcellus formation.