Call it Black Gold or Texas Tea, but it is flowing like mad in the Lone Star State. A new report from IHS Markit predicts the Permian Basin in West Texas will double its oil output by 2023, which would outpace all OPEC nations except Saudi Arabia. Specifically, the report forecasts the Permian Basin will produce an additional 3 million barrels per day in the next five years, for a total of 5.4 million barrels per day. That 3 million barrels per day is more than the current production of Kuwait.
The surge in U.S. oil production in recent years and its projected growth is turning the international oil market on its ear. "This is really created a new dynamic in the market," says Bob Tippee, editor of Oil & Gas Journal. "It definitely has the attention of OPEC producers, Russia, and the others."
Tippee tells KTRH that the American oil industry has come a long way from the days when producers were trying to squeeze every last drop they could out of the ground. "Not so long ago people were saying this is going to play itself out, there's not that much oil and gas in the world, and now we've kind of moved beyond that," he says. "There's so much there, can we actually produce it and move it to market with the given infrastructure, can the infrastructure catch up with the production growth, that is the question now."
Indeed, the IHS Markit report projects $308 billion in new upstream spending and infrastructure in the next five years, which will bolster an already positive employment outlook for the industry. "The report is talking about 41,000 new wells by 2023," says Tippee. "That's a lot of work, and it's also a lot of jobs."