The boom in shale oil production slowed down at the very moment when the importance of its production reached a new level due to the attack on the enterprises of Saudi Arabia.
According to The Wall Street Journal, US oil production in the first half of the year increased by less than 1%. Last year, over the same period, it grew by 7%.
Such a slowdown was expected, as in 2018 the growth was too high: production increased from 10 million barrels per day in January to 12 million barrels in December. Now the US Department of Energy reports that oil production by the end of the year will grow to only 12.2 million barrels per day.
Partially, the slowdown is due to the fact that many wells were drilled very close to each other, and the production sites are exhausted earlier than expected. In addition, the technologies that allowed achieving a record level of production are no longer so effective, the newspaper writes.
“We are approaching the peak of production and the peak of capacity of these wells”, said James West, Managing Director of Evercore ISI Investment Bank James West. The diminishing well capabilities suggest that companies will need to squeeze more of them even to simply maintain their current production level, the newspaper said.
By 2020, US oil production will increase by 480 thousand barrels at a price of $62 per barrel, IHS Markit experts say. They believe that even a hypothetical price growth of $10 will increase production by only 200 thousand barrels per day, which is much slower than last year's growth.
Earlier, Reuters reported that Exxon Mobil had been going to cease operations in the British North Sea and focus on the production of shale oil and gas in the United States, and on the development of new projects. The company's assets in the North Sea are estimated at $2 billion.