U.S. oil production averaging 5.268 million barrels per day (b/d) through October, the gain in U.S. output will be the most since the country produced 9.637-million b/d in 1970, which turned out to be the peak year of U.S. crude output, according to Platts’ analysis of data published by the U.S. Energy Information Administration (EIA). If that 5.268 million b/d figure holds through December, this year would show a 6.4% boost from the 4.95 million b/d average of 2008 and rank as the best U.S. oil production year since 2004, when output averaged 5.419 million b/d.
Last year’s hurricane curtailments distorted the production numbers somewhat for the 2008 comparison, given that 183,000 b/d of Gulf of Mexico output was still offline at the end of that year. However, 2009 is still expected to post increases of 3% and 4% from the relatively storm-free years of 2006 and 2007.
Projections from the U.S. Minerals Management Service (MMS) indicate that the primary driver for this year’s U.S. oil production resurgence is actually just getting started. That driver is the Gulf of Mexico, where operators have begun launching a group of new fields, fulfilling what has been a decade-long focus on unlocking the promise of deepwater exploration there.
In its reporting, Platts concluded that with the jump in the Gulf of Mexico, combined with the emergence of two other new oil-production trends, it appears the U.S. has a chance of at least maintaining oil output in the range of five million to six million b/d for some years to come. “We see it above five million barrels per day for the next 10 years or so,” Platts quoted Peter Jackson, senior director for IHS CERA, as saying. “There is still a tremendous amount of exploration potential in the U.S. and that plateau could be sustained.”
Besides growth in the Gulf, those other trends involve further development of the Bakken Shale oil play in North Dakota and success by a group of operators now training their onshore exploration sights toward new oil targets at the expense of natural gas.
Oil Imports are Down
For the final three months of 2008, net imports – reported weekly by EIA — were never less than 10.5 million b/d, and were as high as 12.68 million b/d. This year, the EIA is reporting that net imports in the first week of October were 10.1 million b/d, have not been higher since, and have been as low as 8.84 million b/d.