NEW YORK: Shale oil producers in the southern United States could take at least two weeks to restart the more than 2 million barrels per day (bpd) of crude output that shut down because of cold weather, as frozen pipes and power supply interruptions slow their recovery, sources said.
The winter storm that gripped Texas and much of the country over the past week forced the biggest ever weather-related shutdown in the Permian Basin, cutting 2 to 4 million bpd from nationwide oil output and hitting the roughly 5 million barrels produced each day from top shale producing state Texas especially hard, report agencies.The shut in oil production represents 2 to 4per cent of global supply, so a slow recovery would tighten worldwide crude markets and may bolster prices that already hit a one-year peak earlier this week.
There may be glitches in supply as utilities assess and repair damage, industry sources said.
“I think it will be a while before things get better out in the field,” one executive at a Permian producer said, on condition of anonymity.
Typically, oil production can be restarted quickly after cold weather, but the scale of the shutdown is unique, said Jodi Quinnell, research director at energy researcher and consultancy Wood Mackenzie.
“Within the Permian, it’s definitely different this time around, partially because of the sheer amount of production taken offline,” Quinnell said.
Permian Basin oil production is down 35per cent, dipping below 3 million barrels a day in output for the first time since 2018, according to Wood Mackenzie data.Problems in accessing the fields and equipment could slow the recovery, executives at oil companies said.
Some companies that truck equipment and workers into Texas shale basins to repair frozen wells and gathering lines have been unable to access certain roads due to icy conditions, a worker at one Texas trucking company said.