The US Energy Information Agency (EIA) has said that the efficiency of oil production from new wells in tight formations, which is commonly referred to as shale oil, increased for the 10th year running in 2019, helping to boost total US oil production to new record levels.
The EIA says that operators have been helped by the combination of more efficient production and higher oil prices since 2017. In addition to helping them meet their drilling and production costs, this has enabled producers to refine their technologies to achieve ever greater efficiencies. The EIA notes:
“In particular, well productivity was improved because of the injection of more proppant during the hydraulic fracturing process and the ability to drill longer horizontal components (also known as laterals) and perforate more stages.”
While the US shale oil boom was originally characterised by smaller operators, many big names like BP and ExxonMobil, the companies behind the Castrol and Mobil lubricant brands respectively, have brought their own resources and expertise to shale oil formations.
Thanks to the increased efficiency, operators have managed to sustain production growth despite the dropping rig count in 2019. The EIA currently estimates that the US produced 12.2 million barrels per day (bpd) in 2019. The growth in US shale oil production is widely expected to slow this year, but the EIA still expects modest growth, mostly from the prolific Permian Basin. It currently predicts average oil production of 13.3 million bpd and 13.7 million bpd for 2020 and 2021, respectively.
