New IHS Markit Data Finds Permian Could Rival World’s Largest Oil Field
The latest data from energy research firm IHS Markit estimates the Permian Basin holds between 60 and 70 billion barrels of technically recoverable resources. Stretching across West Texas and Southeastern New Mexico, the Permian has seen resurgence in activity thanks to new technologies like hydraulic fracturing and horizontal drilling. It is these same technologies, the IHS study concludes, that will allow oil and gas development to continue in the Permian for years to come.
To determine the size of the remaining resource base, researchers used data from more than 440,000 wells in the region. Analyzing this data with a new technology that took researchers three years to build, IHS was able to “completely reassess” the potential of the Permian Basin using a 3D model. With this model, IHS finds that even though roughly 39 billion barrels of oil has been produced from the basin since production began in the 1920s, there is still a massive amount of resources left to be unlocked.
In fact, IHS estimates that Permian production could soon surpass its peak set in 1973, thanks to advances in shale development. As the press release notes:
“With the onset of horizontal drilling and new completion technology during the past decade, the production decline in the Permian has been reversed and the basin is on track to soon eclipse its previous peak…”
Such a large resource estimate now puts the Permian firmly within striking distance of Saudi Arabia’s Ghawar field, thought to hold around 75 billion barrels of oil, putting the Permian in “super basin” territory. As Prithiraj Chungkham, director of unconventional resources at IHS Markit and co-author of the report states:
“The Permian Basin is America’s super basin in terms of its oil and gas production history, and for operators, it presents a significant variety of stacked targets that are profitable at today’s oil prices.”
This is not the first time the resource base within the Permian has been found to be larger thanks to fracking. In May of this year, the U.S. Geological Survey (USGS) estimated that the Spraberry Formation in West Texas holds roughly 4.2 billion barrels of oil – about 700 percent larger than previously thought. USGS Energy Resource Program Coordinator Walter Guidroz credited “changes in technology and industry practices” as the driver of what resources are technically recoverable in the formation. Moreover, the Wolfcamp Formation in the Permian was estimated to hold 20 billion barrels of recoverable oil in a November USGS assessment, making it the “largest estimate of continuous oil” that the agency has ever assessed United State.
Outside of the Permian, hydraulic fracturing has unlocked recoverable resources across Texas. In 2015, the USGS revised its previous estimate of natural gas resources in North Texas’ Barnett Shale, increasing the estimated resources to 53 trillion cubic feet – over twice the previous assessment of 26.2 trillion cubic feet. Further, earlier this year the agency estimated that the Bossier and Haynesville Formations along the Gulf Coast holds over 304 trillion cubic feet of natural gas, making it the “largest continuous natural gas assessment USGS has yet conducted.”
As shale development continues to improve, massive resource assessments like this latest from IHS could become even more commonplace and further prove the United States as a dominant force in the global energy market.