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Permian Basin production expected to rise by 3 million bpd by 2023, report shows

Oil production in the Permian Basin, already a major force in global supply growth, will rise nearly 3 mbd by 2023 — a level of growth exceeding most recent estimates, a new outlook by business information provider IHS Markit says. What the report describes as a "stunning" level of growth will comprise more than 60 percent of net global production growth during that timeframe.

Total oil production in the Permian will be 5.4 mbd in 2023, more than the total production of any OPEC country other than Saudi Arabia. Nearly 41,000 new wells and $308 billion in upstream spending between 2018-2023 will drive that growth.

Production of both natural gas and natural gas liquids (NGLs) in the Permian are also expected to double during this period, reaching 15 bcf/d and 1.7 mbd, respectively.
"In the past 24 months, production from just this one region—the Permian—has grown far more than any other entire country in world," said Daniel Yergin, vice chairman, IHS Markit. "Add an additional 3 mbd by 2023—more than the total present-day production of Kuwait—and you have a level of production that exceeds the current production of every OPEC nation except for Saudi Arabia."

The new IHS Markit Permian production outlook draws on information from the company's proprietary Performance Evaluator database—which includes detailed information of more than one million wells globally—along with the combined analysis of IHS Markit experts covering global crude markets, North American gas, midstream and infrastructure, costs, natural gas liquids and company research.

Despite the $308 billion price tag—well above the $150 billion spent from 2012 to 2017—access to capital will not be the primary challenge for Permian production in coming years. Among other factors, the outlook expects wells to operate with positive cash flow, unlike prior years.

The outlook anticipates a market where oil prices stay around $60 per barrel or higher. In that price scenario, it is lags in necessary infrastructure, rather than the availability of upstream investment, that represents the greatest potential challenge, the report says.
"The infrastructure challenges in the Permian illustrate a fundamental mismatch between upstream oil producers and midstream players," said Jim Burkhard, vice president and head of crude oil markets at IHS Markit. "The former are focused on fast growth while the latter require sustained high utilization of infrastructure over decades for projects to be viable."

The IHS Markit Permian production outlook factors in the assumption that some logistical bottlenecks will occur, causing some wells to be deferred to the latter half of 2019 for instance. The Permian's robust production growth is expected even with such constraints.

"Far from a ‘best case' forecast the IHS Markit outlook applies realistic scenarios and anticipates likely bottlenecks," said Raoul LeBlanc, executive director and head of the IHS Markit Performance Evaluator. "That the outlook still expects the Permian to exceed existing (and already lofty) expectations speaks to the region's unique and growing prominence to the world oil market. The level of growth—from 0.92 mbd in 2010 to 5.4 mbd in 2023—is truly stunning."

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Pipelines

Surerus Murphy JV named as Coastal GasLink pipeline contractor

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Industry News

U.S. natural gas production may grow up to 60 percent in next 20 years

A well in the Pennsylvania Marcellus Shale.  – Flickr user wcn247, used under Creative Commons license https://creativecommons.org/licenses/by-nc/2.0/

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NOV launches GoConnect condition monitoring services

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Web-based software improves pipeline survey speed and quality

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Eagle Spirit, unions sign MOA for pipeline proposal

Back Row – (L to R) Heiko Wiechern - International Representative, UA Canada; James Kennedy - Director & Administrator, Eagle Spirit Energy Holdings Ltd.; Mark Olsen - Western Canada Sub-Regional Manager, LIUNA; Walter Canta – Business Manager, Teamsters Local 213; Gary Kitchen – Director of Construction, Teamsters Canada; Patrick Campbell – International Representative, IUOE Sitting – (L to R) Calvin Helin – Chairman & President, Eagle Spirit Energy Holdings Ltd.; Brian Cochrane – Business Ma (CNW Group/International Union of Operating Engineers)

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Pipelines

Durable screw and vane pumps from SPX FLOW

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Volvo Penta targeting electric power introduction for 2021

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Pipelines

SPX FLOW ClydeUnion pumps designed for most stringent of demands

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Industry News
Software & IT

SAP and Endress+Hauser work on joint IIoT solutions

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