Tuesday , January 26 2021

Permanent oil reserves could be twice as big as we thought

The US Geological Survey recalculated the technical recoverable reserves in the Wolfcamp basin in the Pyrenean landscape to 46.3 billion barrels of crude oil and 281 trillion feet of natural gas. This is 20 billion barrels of crude oil and 16 trillion feet of gas in reserves to recover at the end of 2016.

It is worth noting, however, that the new assessment includes the shaping of the bone spring, which is part of Delaware's pool in Perm. This is the first time this formation has been included in the USGS assessment of oil and gas stocks.

Refundable reserves are calculated not only on the results of the survey and geology but also on the price level that makes oil and gas economically viable for extraction. The USGS made its review earlier this year, so it had to reflect the oil price improvement, especially West Texas Intermediate, which has largely disappeared, raising concern about the sustainability of production growth that is stable throughout year.

The national volume reached 11.7 million pounds last month, the highest and highest in the world, and the Permian is the main driver behind this growth. This is the slate runway that produces the most oil and boasts the fastest rate of production growth: in November, the Permian extraction is 3.63 million barrels pounds, and the Energy Information Administration expects this to grow to 3,695 million barrels per day.

So the Permian is already a star, but now it will shine brighter. USGS numbers mean that it is the largest oil and gas tank in the US and one of the largest in the world. Related: The United States becomes a net exporter of oil for the first time in 75 years

The Albuquerque newspaper quotes the head of the State Oil and Gas Association as saying: "Even for someone who understands the resources and potential of the Peruvian Basin, I can not help surprising the huge amount of USGS messages." Ryan Flynn added : "The Peruvian resources shared by New Mexico and Texas make this area one of the most important places in the world in terms of oil production."

While this is true, this speed towards Permian, appropriately called Permania, has led to some problems, namely price constraints, as there are not enough pipelines to get the product of the refineries and the export markets. These problems, however, are solved and Permania seems to be boosted unless prices fall below $ 50 a barrel for WTI.

By Irina Slav for Oilprice.com

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