Report Suggests Permian Basin Production Could Peak in 4 Years

A report by Wood Mackenzie has a lot of the oil and gas industry talking about the Permian Basin and whether the suggestion could be accurate that the hottest U.S. shale play could hit its peak in four years.

The report is entitled “Geology vs. technology: how sustainable is Permian tight oil growth?”. It not only suggests the Permian production could rise to more than 5 million bpd in 2025 but also raises the question of how well spacing and well-on-well interference could affect production.  “Putting more than 1.5 million b/d of future production questions,” said the Wood Mackenzie report.

The study raised the possibility that drillers might soon start to test the Permian’s geological limits.

“If E and P companies can’t overcome the geological constraints with tech breakthroughs, Permian production could peak in 2021, putting more than 1.5 million bpd of future production in question and potentially significantly influencing oil prices,” stated the report.

The analysis said well interference during fracking could affect the future production by 30 percent.

“These reservoir issues could begin to manifest as sweet spots become exhausted. Taking into account some bearish assumptions, if future wells tap more difficult rocks, and are not offset by continued technology evolution, the Permian may peak in 2021,” Robert Clarke, Research Director for Lower 48 Upstream at Wood Mackenzie, said.

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