The Permian Basin has been the engine of growth behind the US shale revolution over the past 15 years, smashing records and expectations all along the way. But there are reasons to believe that the region is starting a new chapter that will be focused more on endurance than expansion.
Public data shows tight oil production growth in the basin might be cresting. The region’s rig count in December according to Baker Hughes was about 250, down from slightly over 300 a year earlier. Waves of consolidation have reduced workforces and left fewer big deals to expect, but they have also concentrated many of the remaining untapped drilling locations among the biggest operators that are planning to stay put for a long time.
As the realities of managing a maturing basin settle in, technologies and strategies that can support a long production plateau are becoming a bigger part of the conversation.
At the recent Permian Basin Energy Conference (PBEC) in Midland, Texas, some of the region’s top operators pointed to the positive impacts of large cube developments, simultaneous completions, horseshoe well designs, expanded automation of wellhead and lift systems, and field-level optimization driven by artificial intelligence (AI). But challenges related to sourcing power for the region’s newest wells that must rely on artificial lift early in their life were also discussed.
One of the most telling indicators of the basin’s maturity comes from two of the Permian’s heavyweights, Chevron and Occidental Petroleum, both of which highlighted their plans to launch large-scale unconventional enhanced oil recovery (EOR) programs.
Tertiary recovery has played a minor role in the story of the US shale sector, long overshadowed by the returns made from developing Tier 1 source rock.
