Todd Peterson

Posted: 1 week, 4 days ago


THE PERMIAN BASIN: A U.S.A. OIL PRODUCTION POWERHOUSE

The Permian basin, located in west Texas and southeastern New Mexico, shows how well this area is contributing to the U.S.A.’s oil production. Since January 2010, the compound annual growth rate is 13%, rising from 886,000 barrels per day (bbl/d) to over two million bbl/d. How has this growth come to be?
The Permian basin has been in production since the early 1900s. With this much production history behind it, one may suppose that the production level would fail to increase, however, many factors contribute to the production growth. The factors include improving oil prices over this long period of time, technology, and improving basin and reservoir understanding and management. As an analog in understanding the knowledge of the basin and reservoir management, Texas’s proved reserves of oil reserves have better than doubled over the past five years, from six billion barrels in 2010 to 14 billion barrels in 2014. Technology has also contributed with secondary recovery, such as water flood and carbon dioxide injection, to increase oil production. As for prices, since the late 1960, real oil prices climbed from about $20/bbl to over $100/bbl in the early 2010s and today’s current price around $45/bbl. These factors have combined continue to push Permian oil production higher.



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