Shale oil production in southern U.S. reaches record high in 2017

HOUSTON, Dec. 27 (Xinhua) -- Shale oil production in southern U.S. states hit a record of 815 million barrels in 2017, according to the business research firm IHS Markit.

IHS Markit said in its latest analysis, released on Tuesday, that the oil production in the Permian Basin, a mature hydrocarbon 'super basin' located in west Texas and southeastern New Mexico, reached a new record, far exceeding its previous peak of 790 million barrels set in 1973.

In 1973, operators pumped an average of 2.16 million barrels of oil and gas liquids per day, and Permian volumes this year will average 2.75 million barrels per day, IHS said.

By mid-year 2017, average monthly production of Permian Basin already exceeded its best month during the former peak year of 1973. For 2017 year-to-date through July, Permian liquids production exceeded 484 million barrels, or an average of slightly more than 69 million barrels per month.

By the end of 2018, the Permian surge should push total U.S. liquids production to a new all-time high of 10.5 million barrels per day, said Reed Olmstead, director of energy research and analysis at IHS Markit.

The Permian Basin was ranked at the top among all U.S. shale oil basins in the latest drilling productivity report, issued by the U.S. Energy Information Administration.

Operators began production in the Permian Basin in the 1920s and have since pumped more than 39 billion barrels of oil there.

Conventional oil production -- vertical wells drilled into traditional reservoirs -- declined steadily from 1970s to early 2000s, before horizontal drilling and hydraulic fracturing remade the U.S. oil industry.

"The significance of this second production peak cannot be overstated, since it truly revived a basin," said Pete Stark, executive director of upstream research at IHS Markit.

"When we consider the impact on the world's crude markets, the Permian has to be considered a global disrupter," said Stark.

IHS energy researchers believe the Permian Basin still holds as much as 70 billion barrels of technically recoverable resources, about twice as much as the total oil production to date. Enditem