The head of Schlumberger is predicting we have seen the last of the crazy rate of production in U.S.shale. And that includes Oklahoma.
It’s the claim of CEO Olivier Le Peuch, the man who runs the worldwide company with exploration and production offices throughout Oklahoma where some of that “crazy” oil production has occurred over the past several years.
Le Peuch told Reuters this week there will be continued growth in US shale production, but it will slow to 600,000 to 700,000 barrels a day in 2020. He thinks it might even drop to as low as 200,000 barrels a day in 2021, adding will level off, never to reach the production levels it once did.
Unless, of course, there are significant developments in new technologies that will allow E&P companies in the United States to lower their costs, Le Peuch said.
This isn’t the first time that analysts and industry players have called the end to the rapid growth in US Shale that has forever changed the landscape of the global oil industry. And while most believe that US shale cannot possibly sustain the rapid rate of growth it has seen up until now, few agree on when, exactly, this rapid growth will slow to next to nothing.
Few analysts predicted that Saudi Arabia would still be taking the brunt of the OPEC cuts on itself, effectively subsidizing oil prices for the entire world—and it is precisely this subsidy that is allowing US shale to keep pumping more and more.
But Schlumberger sees this US Shale heyday ending soon, and is already preparing for tough times, after experiencing a strong Q4—but not in North America. Rather, its international business carried the oilfield services giant to better than expected profits. Determined to improve Schlumberger’s bottom line in North America, it cut 1,400 jobs since Q3 2019, and is looking to ditch underperforming businesses.