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Western CEO warns US risks losing energy independence

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Western CEO warns US risks losing energy independence

(Bloomberg) — Occidental Petroleum Corp. warned that the independence of the US energy sector is in danger of slipping away if shale gas production reaches a plateau and begins to decline.

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“It’s starting to tip over, and if that happens, the U.S. is at risk of losing our energy independence,” CEO Vicki Hollub said Thursday in a presentation at Hart Energy’s Executive Oil Conference in Midland, Texas. . “That could happen over the next five years until we reach a plateau.”

The US pumps more than 13 million barrels per day, which surpasses all other countries and has increased by almost 45% in just ten years. The global oil market is keeping a close eye on whether American explorers can drill enough new wells to offset the natural decline in discoveries of aging shale oil.

Holllub said President-elect Donald Trump understands the business case for using carbon dioxide to scrape more crude from the bottom of oil fields, a technique known as enhanced oil recovery that Occidental has used for years.

“He understands that if you lose all your energy independence, we would be geopolitically weaker in that kind of scenario than we are today,” Hollub said. “What he wants is for us to get the most out of the reservoirs that we have here in the US.”

In the heart of the Permian Basin, bankers and other executives discussed the future of the world’s busiest shale play, which currently produces about 6 million barrels per day.

Permian crude oil production “will peak at just over 7 million barrels per day by the end of this decade,” said Pete Bowden, global head of industrial, energy and infrastructure investment banking at Jefferies Financial Group Inc. “But will then decline more gradually than most experts expect.”

There is 10 to 25 years’ worth of drilling inventory left in the Permian Delaware sub-basin, according to a presentation from ConocoPhillips, based on data from industry consultant Enverus. In the Midland sub-basin, which has been producing oil for more than a century, the drilling inventory is estimated to last between eight and 15 years.

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