The U.S. shale market continues to excel at producing oil and gas for export around the world. Several shale plays are hotbeds of activity. However, there are oil producers dealing with critical obstacles of not being able to find skilled employees for key positions, insufficient pipeline capacity and not enough truckers to handle routine business tasks. Despite the business hiccups, the U.S. produced 10.9 million barrels a day of crude oil in June. The projected average for 2018 is 10.8 million b/d and in 2019 the EIA projects 11.8 million b/d.
Geopolitical risks are all over the oil and gas map. One in particular is Iran, which exports about 2.4 million b/d. The OPEC member will see their exports cut to zero. Buyers of Iranian crude must cut off imports by November 4 or risk sanctions. Venezuela’s oil and gas market continues to decline due to political and economic instability. Oil production by the government owned group PDVSA declined from 3.5 million b/d to 1.5 million b/d. A bright spot in South America is Guyana. The small nation has a potential huge offshore oil discovery. Although, they are in dispute with Venezuela over who owns the rights to the field.
OPEC member nations and Russia agreed to increase production by 600,000 b/d, after holding back for more than a year. The decision was based on rising oil prices, rising geopolitical risks to supply, like Iran, and shrinking global inventories. The tug of war between U.S. shale, OPEC and members outside of the oil-cartel have been a dramatic one the past three years. The saga will continue for some time as each entity forces a heavy hand in the direction of oil and gas supply worldwide.
Companies that were struggling to survive during the oil price downturn are bouncing back. It’s amazing with the constant changes in the oil and gas market, small oilfield businesses, even large companies, are so resilient. During the slowdown, many companies were forced to merge, scale down or close up shop. In this issue of OILMAN, our feature is about Baker Hughes, a GE Company. On the backend of the downturn, Baker Hughes and GE merged to form the world’s first full stream company. Enjoy this issue of OILMAN and most of all, enjoy your summer.