According to new research from Rystad Energy, oil production in the United States’ prolific Permian Basin will grow faster than it will in Iraq.
This is notable because, in addition to being the second-largest oil producer in OPEC, Iraq has vast proven and unproven oil reserves that have yet to be developed. Back in 2010, about one million barrels per day (bpd) were being produced in the Permian Basin, somewhat lower than the UK’s production at the time.
Since then, oil production there has grown to 4.7 million bpd, and it is set to grow further to 5.6 million bpd by the end of this year. By comparison, Iraq’s production is expected to grow by 600,000 bpd this year, although the country has fairly ambitious longer term plans.
Rystad Energy’s Head of Upstream Research, Espen Erlingsen, explained the reasons for the region’s rapidly growing production:
“The Permian has become the hot spot for US oil production thanks to significant resources, low breakeven costs and high oil content. This trend is only likely to continue as global oil markets struggle with supply constraints and the demand for oil shows little sign of easing.”
This view is reflected in recent decisions by the US oil majors ExxonMobil and Chevron, which also make lubricant ranges under the Mobil and Texaco brands, to expand their production capacity in the Permian Basin. The region’s total production is now expected to make up around half of all US production next year.
