U.S. shale, rather than deepwater, is now the lowest cost option for future oil production, Wood Mackenzie said in a report. This means that U.S. shale producers will likely be at a competitive advantage in coming years, which demonstrates the success of these companies in cutting production costs and achieving efficiency gains.
Average production costs have fallen by 30-40% for U.S. shale wells, but only 10-12% for large, new projects elsewhere, FT cited Simon Flowers with Wood Mackenzie as saying. They've largely done so by pursuing lower rates from oil services companies, and by achieving enhanced productivity by drilling in better locations to maximize the use of "sweet spots," the WSJ noted in a report.
For this reason, U.S. shale “oil will be the majority of what’s likely to be developed over the next few years, but at the same time, with decline rates and projected demand we still need all of the 13 million barrels a day,” Flowers added.
Wednesday, July 13, 2016
Wood Mac: U.S. Shale To Be At Competitive Advantage In Coming Years
See? Fracking is better for the environment. No more Deep Water Horizon accidents.