Apache's CEO made the point pretty directly. "If the Permian starts to flatten, US production growth will moderate in coming years, putting a lot of power in OPECs hands," Ben Rodgers, APA Corp.'s senior vice president of finance, said during EnerCom's Energy Investment Conference in Denver, Colorado, Aug. 19.
In a story in S&P Global, it was noted that "OPEC's spare capacity was on a downturn as demand increased, with Saudi Arabia and the UAE specifically accounting for over 80% of the oil group's non-sanctioned spare capacity.
Saudi Arabia and the UAE's spare capacity has remained flat between 2023 and 2024, according to APA, totaling 4.5 million b/d, indicating that supply additions could ease the tight supply environment.
The US would not be able to account for increases in global demand, as near-term crude production was plateauing, Rodgers said, putting more market pressure on the oil group.
Production per rig was slowing down with a decreasing backlog of DUC's in the Permian Basin, according to APA data. Additionally, there has not been a significant gain in efficiencies despite longer laterals and core acreage being developed, Rodgers said.
"The Permian Basin makes up 60% of any growth we anticipate in the US," Rodgers said, adding that they forecast less growth from the US overall as Bakken and Eagleford crude production was in decline.
The rig count was at 297 in the Permian the week to Aug. 7, down 31 from the year-ago period during the week to Aug. 9, 2023, according to S&P Global Commodity Insights data."
The "Big Supply Surprise" hits mainstream media.
I am happy to read that a few people IN the oil and gas industry are relatively honest about our future. This guy has credibility because he is a big CEO (and found Alpine High 😎). I didn't find Alpine High and don't have any credibility but I have been saying the same things he just did for years.
OPEC has always been in charge. They are happy to watch the US drain itself... first.
Republicans are lying about drill baby, drill. It is not the answer they say it is, not for reducing inflation, nor strengthening relationships around the world nor increasing jobs. Jobs are tanking because of the rig efficiency dung heap. If it does increase jobs it will only be for a short time because the Permian Basin CANNOT catch a higher gear and produce 2 MM more BOPD very long.
The Permian Basin HZ LTO play looses 2,600,000 BOPD every year to natural decline. Produce more and it will decline faster.
Energy costs cannot be cut in half, we are not sitting on more oil than the KSA and people will not be able to buy a home because 2 MM more BOPD from the Permian will put $2000 more in their check book every month. Its a lie. There are other reasons to vote that party, but not THAT reason. I wish they would stop that stupid shit. I wish somebody would call them out on it. Its dumb. Its almost as dumb, but not quite as dumb as believing we don't need oil at all and renewables will fix everything (Dems)
Its not fair to always have to choose between the lesser of two wevils.
Which brings us back to oil exports. The more we export now the more power we give OPEC later. I do not know for the life of me why that is so damn hard for people to understand. The more we produce in the way of oil and gas the more of it will get exported and diluted across the big, wide world. How is that going to cut energy costs in half here in our country?