One US Oilfield Is Giving Saudi Arabia A Run For Its Money
Oil companies operating in the Permian Basin are closing in on Saudi Arabia and its state-owned oil company’s world leading idle oil production capacity.
“For decades there was one country and one company that had spare capacity and that country was Saudi Arabia and that company was Saudi Aramco,” former head of reservoir management at Saudi Aramco Nansen Saleri told Bloomberg. “Now we are seeing an analog to that in the Permian.”
Saudi Arabia has held the top spot in idle oil capacity for decades, but due to investment flowing into Permian in recent months, the American oilfield is thought to be second to the oil giant Saudi Aramco in its ability to ramp up production in response to higher demand.
Oil companies in Permian can increase production in about three or four days by tapping into 500,000 barrels a day in idle production capacity. Saudi Arabia currently has about three times that in idle production capacity, according to Bloomberg.
Investment in the Texas and New Mexico oilfield is far from slowing, however. After the GOP tax cuts were signed into law in December, Exxon Mobil pledged to triple its oil and gas production in the area by 2025, The New York Times reports.
The Permian Basin is ideally situated and close to the Gulf of Mexico, where ports sell Permian oil internationally. Energy companies are working on expanding the system of pipelines that connect the ports and world market with the oil flowing out of Permian.
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