Oilman Magazine

Letter from the Editor (January-February 2024)

RMI Supply

Drafting my first Letter from the Editor brings excitement and a curious gaze into my career’s future, but it fades in comparison to the exhilaration of the 2024 oil and gas industry’s potential. Much like a puzzle, as the industry pieces come together, the picture on the box suddenly presents itself. We are now seeing that picture develop when assessing the happenings of 2023 and analyzing their influence as leading indicators for 2024.

Throughout 2023, the industry witnessed significant acquisition and divestiture activity, with Permian Resources buying Earthstone for $4.5 billion and Ovintiv spending $4.3 billion on three Permian companies. However, ExxonMobil’s announcement to acquire Pioneer Natural Resources and Chevron’s intent to purchase Hess monopolized everyone’s attention. With additional acquisitions made, over $120 billion will change hands.

Although these transfers of assets include interests elsewhere, the majority focus on the Permian Basin. This aligned strategy serves as a segue into the next point of interest for 2024. The demand for natural gas has intensified and, while global turmoil and production levels provide a significant level of influence, the primary demand for natural gas has come from the LNG market along the Gulf Coast. While 2024 will experience more natural gas production for LNG and potential export opportunities, the Haynesville and Marcellus Shales are expected to be drawn upon. Still, the Permian promises to be the primary source.

With the pieces all seeming to fit, the puzzle could be completed in 2024. Still, forces from outside the industry could potentially derail planned and made progress. This is an election year, and it is the most important election of all. President Biden’s return to office to serve a second term will likely be an obstruction, while a new political direction might enact a flourishing effect. Regardless, 2024 will be well underway before the final decision is revealed.

Additional considerations should be given to global unrest. Russia’s invasion of Ukraine, the war between Israel and Hamas, and now tension in the Red Sea can all disrupt the supply chain and drive up the costs of conducting business. Ultimately, time will tell.

Strategic moves made during 2023 and bets on the future of fossil fuels have laid the foundation for a prosperous 2024. With demand supporting chess-like moves, the industry stands ready to experience a historical year. The secret to success will lie in combating the forces that wish to see it stumble and fail.

 

 

Author Profile
Freelance Writer and Photographer

Nick Vaccaro is a freelance writer and photographer. In addition to providing technical writing services, he is an HSE consultant in the oil and gas industry with twelve years of experience. Vaccaro also contributes to SHALE Oil and Gas Business Magazine, American Oil and Gas Investor, Oil and Gas Investor, Energies Magazine and Louisiana Sportsman Magazine. He has a BA in photojournalism from Loyola University and resides in the New Orleans area. Vaccaro can be reached at 985-966-0957 or nav@vaccarogroupllc.com

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