Permian Basin Continues “Impressive” Production Growth
The Permian Basin is continuing its track record as a top producer, even as it weathers the uncertain price environment of late. In fact, this weekend, an Energy & Capital article called the production growth in the Permian Basin “impressive”:
“And although output from these projects has only increased by 400,000 barrels per day, the fact that any growth is taking place at all is impressive. Think about it…
When prices dropped below $60 per barrel of oil, a lot of companies had to shut down expansion plans, as well as cut operations — with even more curtailment happening when oil prices fell below $50 per barrel. Still, Permian producers with access to the Gulf were able to stay cost-efficient in the low price market.”
The Permian’s fortuitous location, close to the Gulf, has allowed producers to keep costs down, which in turn allows for jobs to be secured and economic value to be retained. Additionally, producers are working on improving technologies in order to further reduce production costs during the price downturn.
Pipeline infrastructure within the state also aides producers in cutting costs. Texas’ current system is ideal for producers in the Permian because the region is able to transport crude to the Gulf for refining easily thanks to the current setup. Just this week, Phillips 66 announced its plans to build crude pipelines that will connect systems in East Texas, the Permian Basin, Eagle Ford Shale, southern Oklahoma, and the Panhandle to refining facilities in Louisiana. Construction has already begun on the project, and the second half of the pipeline construction will begin in 2017. Pipelines will allow producers to be more time and cost efficient in the transportation process.
Of the state’s top ten crude oil producing counties in June, five are in the Permian Basin (Upton, Andrews, Midland, Martin and Reeves). Midland County had the highest amount of oil and gas jobs added in 2014 of any county in the nation.
Thanks to innovative producers and strategic pipeline planning, the Permian has been able to maintain its reputation as an oil-producing powerhouse within the state of Texas and the entire nation.