The US state of Texas looks likely to shatter its all-time annual oil production record of 1.263 billion barrels from 1972. What’s more, this will be achieved with fewer rigs and workers than a few years ago.
Texas oil economist Karr Ingham, who also developed the Texas Petro Index (TPI), said at a briefing:
“We’re going to blow that record out of the water. Both crude and natural gas production will easily set new annual production records in 2018.”
Oil production in Texas reached 4.3 million bpd (barrels per day) in June, putting it well on track to exceed the existing record by the end of the year. What is perhaps even more impressive though is how the natural gas record will also be broken, despite 92% of current rigs being focused on crude oil production. In fact, more than a third of the natural gas produced in the state is defined as “casinghead gas”, which refers to incidentally produced gas from crude oil operations.
The upstream oil and gas industry in the state has only recovered fewer than half of the jobs lost following the downturn. Recent production levels testify to the resourcefulness of the industry, however, which has achieved remarkable efficiencies. Ingham partly explains these as being born from necessity after the downturn. While US shale oil was previously seen as expensive, big oil companies like ExxonMobil, the maker of automotive lubricants like Mobil Delvac SGO 75W90, have since realised the advantages of US shale in an uncertain oil market.