Oil Production in Permian Basin Projected to Hit Record Highs
According to the U.S. Energy Information Administration, Texas’ and New Mexico’s Permian Basin, is projected to increase oil output by 50,000 barrels per day—bringing overall production to a record-high of 5.453 million barrels per day throughout November. This is the largest increase in oil production between the six oil and natural gas drilling regions in the United States. Additionally, natural gas production in the Permian Basin is forecasted to increase by 127 million cubic feet per day in November.
The Permian Basin represents approximately 40 percent of all U.S. oil production and approximately 15 percent of natural gas production. The Basin is expected to see continued growth in oil production with companies like Chevron announcing commitments to increase output.
Chevron CEO Mike Wirth recently reaffirmed the company’s commitment to increasing production goals throughout the explained:
“We’ve guided [production] to reach one million barrels a day by 2025… and a few years after , production will be in the neighborhood of 1.2 million barrels a day.”
With the increasing demand for oil amidst OPEC lowering oil production targets by 2 million barrels per day starting in November, this increase in production will help to meet oil demands around the world.
This increase comes as politicians are calling for increased investment in American energy sources. U.S. Senator Joe Machin (D-WV), Chairman of the Senate Energy and Natural Resources Committee, called on President Biden to take immediate action to increase domestic energy production, and U.S. Representative August Pfluger (R-TX) said:
“We must refocus on restoring American energy independence. The first step should be ending government-made barriers to oil and gas investment and rolling back regulatory burdens put forth by the Environmental Protection Agency (EPA). Let’s put Odessa, Texas over OPEC and encourage more American production.”
The Permian Basin is a leader in U.S. energy production and represents immense potential to continue to increase oil and natural gas output. Rystad Energy estimates that the United States has over 76 billion barrels of untapped oil reserves – the majority of which are located in the Permian Basin. For example, the U.S. Geological Survey found in 2018 that the Delaware Basin, located in the western section of the Permian Basin, contains an estimated 46 billion barrels of oil in reserves.
The Bottom Line: The Permian Basin is forecasted to hit record-highs of production in November 2022 and with proper investment into oil and natural gas production in the region, the Permian Basin has the potential to substantially increase oil and natural gas output in the years to come.