Alexander Novak Announced the Stagnation of Shale Oil Production in the United States
According to the Deputy Prime Minister of the Russian Federation, the industry has still not recovered from the stress of the pandemic
Shale oil production in the United States is stagnating at approximately the same level, Russian Deputy Prime Minister Alexander Novak said in an interview with Business FM. US shale oil production has plateaued, and the industry has still not recovered from the stress of the pandemic.
“Of course, for the shale industry, the changes that have occurred are very serious. We see that there is no investment there in the volumes that used to go there in order to constantly ensure an increase in the number of wells being drilled. Therefore, the industry today is stagnating at approximately the same level. We will see how the situation develops further,” he said.
The level of production growth in the shale industry that has been observed over the past 10-15 years has plateaued, Novak noted. “Development in two directions is possible here: either the industry will recover and grow at the same rate as before, or at a lower rate, or, in principle, we will see a decrease in production in the shale industry,” added the Deputy Prime Minister.
“The shale industry is going through difficult times in the United States, especially after the pandemic. When the market collapsed during the pandemic, the shale industry suffered greatly because they were overleveraged. And to date, they have not yet recovered from the stress that the shale industry received .And what we see: that banks are reluctant to finance projects in the shale industry, this one; secondly, everyone is afraid that again there will be the same collapse, accumulation of losses, if some events suddenly happen. That is, the shale industry is very sensitive to any price fluctuations “, Novak emphasized.
OPEC forecast in a report in October that U.S. shale oil production would rise to 16.6 million b/d by 2028 from 12.7 million b/d in 2022, reaching a plateau before contracting from the early 2030s.
Previously, the US Department of Energy raised the forecast for daily oil production in the country in 2023 by 20 thousand barrels – to 12.78 million barrels per day (b/d), which is 890 thousand b/d more than in 2022. Expected production volumes in 2024 are 13.16 million bpd.
