A return to pre-pandemic US oil production levels could be years away as shale operators continue to rein in spending and production growth, despite a more than 50% rise in oil prices so far this year, said oil producer Hess Corp. "Shale will not be growing at the level that it was growing at in the last five years ... it's going to be hard to get to pre-COVID levels of 13 million barrels a day probably for the next three or four years," said Hess CEO John Hess.
Continental Resources founder and Chairman Harold Hamm believes oil prices have more room to grow, but drilling activity is unlikely to accelerate significantly as private and publicly-traded oil producers alike practice restraint and focus on shoring up their balance sheets. Continental has not hedged any oil supplies for this year and next, which puts it in a good position to cash in on the recovery, Hamm said.
As cash and futures natural gas prices at North American hubs continue to climb, attention is turning to how natural gas producers will react to the stronger price environment and whether they will stick to capital discipline commitments. S&P Global Platts projects US gas production will climb to 92.5 billion cubic feet per day by December, up from 90.9 Bcf/d as of July 26, and average 91.7 Bcf/d next year.
US shale producer Pioneer Natural Resources expects to take an $832 million hit in the second-quarter from its oil and gas contract derivatives following a jump in prices, bringing its total losses on derivatives for 2021 to $1.5 billion. Consultancy Enverus says that US oil firms had been expected to face an aggregate $7 billion in hedging losses during Q1 2021.
US liquefied natural gas exports surged 42% year over year to average a record 9.6 billion cubic feet per day in the first six months of 2021, driven by rising global LNG demand and higher international spot prices for gas and LNG, according to the Energy Information Administration. Asia accounted for 46% of first-half US LNG exports, followed by Europe with a 37% share.
Interior Secretary Deb Haaland said during a Senate hearing on Tuesday that the federal oil and natural gas leasing program review "is being finalized internally and we hope to get it out very soon." Haaland dodged questions about whether the Interior Department would resume oil and gas lease sales on federal lands in the third quarter, as mandated by a court order.
Some lawmakers say they remain hopeful of passage of a $1 trillion bipartisan infrastructure proposal, as they address contentious issues that have impeded passage. "We're not there yet, but we're making progress," says Senate Majority Leader Chuck Schumer, D-N.Y. "The number of issues has been narrowed significantly."
API eLearning Training Courses | API Inspection Series
API has recently launched a suite of inspection-focused online training courses based on API Recommended Practices 510, 570, 572, 576, and 577. Each course is designed to provide the learner with practical knowledge of inspection competencies. Inspectors, engineers, and other personnel will be educated on a variety of practices including but not limited to pressure vessel inspection, inspection of pressure-relieving devices, procedure and performance qualification, and welding processes, inspection, and metallurgy. Additional courses will be continually added to this training series. To learn more about upcoming offerings and to register for this eLearning course series, visit API Learning.
2021 COS Forum, Oct. 27, Virtual
Please join the Center for Offshore Safety for 2021 COS Forum. The forum brings together offshore industry operators, drilling contractors, service/supply companies, academia, and regulators to facilitate collaboration and drive continual improvement. The event will be virtual. Learn more.