First oil

As opposed to the general public’s lack of knowledge of certain key facts, we in this industry are keenly aware that oil production continues to play a key role in the U.S. economic and energy landscape. Most everything from gasoline prices to clothing to plastics is impacted by the cost of extracting petroleum and all its byproducts.  

So, in the context of policy debates and governmental actions, it’s helpful to remind the U.S. public of some basic inalienable facts about the country’s oil production. This is why a recent report by USA Facts is so handy. It analyzes data take directly from the U.S. Energy Information Administration (EIA) and derives trends and conclusions that we at World Oil would reach, if we undertook the same project. We should point out that USA Facts is a not-for-profit, nonpartisan  

Current state of U.S. output. Looking at the state of the country’s oil production today, USA Facts said, “Domestic energy production has increased faster than at any other time in history, with crude oil production more than doubling between 2011 and 2022, Fig. 1. U.S. crude oil peaked in 2019, with the country producing an average 12.3 MMbpd.”  

Fig. 1. U.S. oil production more than doubled from 2011 to 2022. Image: USA Facts/U.S. EIA.

Not to anyone’s surprise in this industry, the EIA data show that the U.S. has been the largest producer of crude oil globally since 2018, surpassing Russia and Saudi Arabia. The report found that the EIA is now expecting U.S. crude production to increase to record heights of 12.8 MMbpd in 2023 and 13.1 MMbpd in 2024. 

Individual state production. USA Facts found that in 2022, over 70% of total U.S. crude oil production came from just five states. In descending order these were: 

• Texas: More than 1.8 Bbbl of crude oil produced during the year, or 42.4% of total U.S. output.
• New Mexico: More than 574 MMbbl of crude produced, or 13.2% of U.S. output 
• North Dakota: More than 386 MMbbl produced, or 8.9% of U.S. output 
• Alaska: More than 159 MMbbl produced, or 3.7% of U.S. output 
• Colorado: More than 157 MMbbl produced, or 3.6% of U.S output. 

In addition, 14.7% of total crude oil produced in 2022 came from offshore fields in the Gulf of Mexico. 

Crude production rates, said USA Facts, have varied over the past 40 years across different states. In some states, such as Alaska and California, production rates have fallen steadily, as existing deposits are exhausted and exploration and development of new sites lags. Of course, we at World Oil would point out that both states have suffered from political interference and meddling, with California suffering in the extreme.   

Meanwhile, other states, such as Texas, New Mexico and North Dakota, among others, have had a relative boost in production over the last decade, partially resulting from the widespread utilization of fracing, as well as far more favorable governmental policies and actions. 

The positive role of fracing. Speaking of hydraulic fracturing, the process since 2015 has accounted for more than half of total U.S. crude production. During 2022, two-thirds of all U.S. oil came from fracing, compared to under 7% two decades ago, Fig. 2.  

Fig. 3. In 2022, two-thirds of all US oil came from fracing. Chart: USA Facts/U.S. EIA.

USA Facts accurately noted that “while hydraulic fracturing has helped to extract fossil fuels for over six decades, its significant contribution to crude oil production is a more recent development. This technique, combined with horizontal drilling, has led to an unprecedented surge in oil production over the past several years.”  

On the downstream side of things, USA Facts reports that the U.S. during 2022 had an average daily petroleum consumption of about 20.3 MMbbl. That level equates to about 7.4 Bbbl of petroleum for the year. We commend USA Facts for trying to present the facts and figures in a dispassionate, unbiased manner. Hopefully, these realities find their way down to the general public.  

Global exploration yielding results. We’ve seen a pickup in exploration resulting in good discoveries over the last several months. While a majority have been offshore, which is not surprising, it is encouraging to see some onshore finds, as well. And the assortment of discoveries is wide-ranging, including South America, Western Europe, Eastern Europe, Africa and Southeast Asia.  

The first of the discoveries occurred offshore Norway, when Aker bp announced on May 25 that they had successfully completed drilling of the Øst Frigg Beta/Epsilon exploration well in the Yggdrasil area. This marks the longest exploration well ever drilled on the Norwegian Continental Shelf (NCS), and it resulted in a significant oil discovery, originally estimated at 40 MMboe to 90 MMboe. However, on June 8, the firms updated that estimate to between 53 MMboe and 90 MMboe, which is twice as large as the original pre-drill estimate.   

Then, on June 13, a somewhat rare onshore oil and gas find in Romania was announced by OMV Petrom. Billed as Romania’s largest crude oil discovery in decades, the find from drilling three wells totals more than 30 MMboe in the Oltenia and Muntenia regions of the southern part of the country. This find is equivalent to about three-quarters of OMV Petrom’s 2022 production.  

The same day (June 13) as the Romanian find, TotalEnergies said that it struck the Ntokon oil and gas discovery on OML102 offshore Nigeria. Drilled in shallow waters, 60 km off the southeast coast of Nigeria, the Ntokon-1AX discovery well encountered 38 m of net oil pay and 15 m of net gas pay, while its Ntokon-1G1 sidetrack encountered 73 m of net oil pay, “in well-developed and excellent quality reservoirs.” Ntokon-1G1 tested successfully up to a maximum rate of about 5,000 bpd of 40° API oil. Located 20 km from the Ofon field facilities on OML102, Ntokon is planned to be developed through a tie-back to these existing facilities. 

Roughly two weeks later, on June 28, Frontera and CGX announced an oil find offshore Guyana. The firms said they discovered oil at the Wei-1 well, on the Corentyne Block, about 200 km offshore from Georgetown. The Joint Venture finished drilling operations and expected to release the drilling rig in early July. The Wei-1 well encountered 210 ft of hydrocarbon-bearing sands in the Santonian horizon. The JV acquired wireline logs and extensive core samples from the Santonian; however, due to a tool failure downhole and a new tool not being available, oil samples were not obtained. The rock and fluid properties of the Santonian were due to be analyzed by an independent third-party laboratory over two to three months, to define net pay and a basis for evaluation of this interval. 

Meanwhile, in a related story during June, it was announced that recent finds have pushed Guyana’s reserves to 11 Bboe. This is believed to be the largest new addition to global oil reserves in several decades. 

On July 10, a very significant gas and condensate find on the Carmen prospect offshore Norway was announced by DNO, along with partners Wellesley Petroleum (operator), Equinor and Aker bp. According to DNO, preliminary evaluation of comprehensive data, including cores and fluid samples, acquired from the discovery well and a follow-on extended sidetrack indicates gross recoverable resources in the range of 120 MMboe to 230 MMboe on a P90-P10 basis. At 175 MMboe, the mid-point of this range, Carmen ranks as the largest discovery on the Norwegian Continental Shelf since 2013. Given this discovery and the Aker bp find of May 25, this could wind up being the best year for total reserves added by discoveries on the NCS since 2013. 

Over in Southeast Asia, Petronas on July 21 said that it had made six oil and gas discoveries in five blocks off the coast of Sarawak, Malaysia. The Gedombak well in Block SK306 and the Mirdanga well in Block SK411 (in the Balingian province), the Sinsing well in Block SK313, the Machinchang and Pangkin wells in Block SK301B, and the Kalung Emas well in Block SK315 (in the West Luconia province), stem from new and existing groups of oil fields. The oil and gas finds were achieved by an intensive domestic exploration drilling campaign commenced in late 2022 that also led to the Nahara-1 discovery in Block SK306, a significant oil find by PETRONAS Carigali within the last few decades. 

A week later, on July 28, OMV announced the Wittau Tief-2a exploration well onshore Austria to be a confirmed natural gas discovery. The company said the well represents Austria’s largest natural gas discovery in 40 years. The well, in lower Austria, was drilled to a final depth of 5,000 m after five months of operations. A preliminary evaluation indicates potential recoverable resources of approximately 28 MMboe. After fully developing the discovery, OMV expects its natural gas production in Austria to increase 50%. OMV is considering different options to further appraise the field, as well as a fast-track development in conjunction with the OMV-operated natural gas facility in Aderklaa, situated 10 km from the new discovery. 

Finally, another onshore discovery was struck in Bolivia by state firm YPFB. As announced on Aug. 7 by YPFB, a gas find was made in the Remanso-X1 well. The company estimates that the new reservoir will generate roughly $5 billion in gas revenue for the country. “The well is undergoing condensate production tests (48° API),” said the president of the Plurinational State of Bolivia, Luis Alberto Arce Catacora. “These results will allow it to be classified as the discoverer of a new hydrocarbon field, with resources estimated at 0.7 Tcf and 52 MMbbl of liquids." 

Family EV trip gone awry. Last, but not least, we have a story that should be a lesson to governmental officials everywhere that push alternative energy strategies without considering infrastructure and common sense concerns. According to the FOX Business Channel, a Canadian man is calling electric vehicles the "biggest scam of modern times" after his frustrating experience with an electric truck.  

Dalbir B. (we’re withholding his last name, to give him some privacy), who lives in the Winnipeg area, bought a Ford F150 Lightning EV in January for $115,000, plus tax. He told FOX Business he needed the vehicle for his work, but also wanted something suitable for recreational activities, such as driving to his cabin or going fishing. He also wanted an environmentally friendly vehicle, because owning one is "responsible citizenship these days."  

But Dalbir soon discovered the reality of owning and operating an EV, soon after the purchase. The vehicle forced him to install two chargers—one at work and one at home—for $10,000. To accommodate one charger, he had to upgrade his home’s electrical panel for $6,000. In all, he spent more than $130,000, plus tax.  

Not long after the purchase, Dalbir was in a minor accident which, he said, required "light assembly" on the front bumper. He took the vehicle to the body shop and did not get it back for six months. He said no one from Ford answered his emails or phone calls for help.  

The limitations of the EV truck became even more apparent when Dalbir embarked on a chaotic 1,400-mi road trip to Chicago. Fast charging stations—which only charge EVs up to 90%—cost more than gasoline for the same mileage. At the family’s first stop in Fargo, N.D., it took 2 hrs and $56 to charge his vehicle from 10% to 90%. The charge was good for another 215 mi.  

On the second stop, in Albertville, Minn., the free charger was faulty, and the phone number on the charging station was not helpful, he said. The family drove to another charging station in Elk River, Minn., but the charger was faulty there, as well. "This sheer helplessness was mind-boggling," Dalbir wrote in an online post. "My kids and wife were really worried and stressed at this point." There were no other fast-charging stations within range of Elk River, and his vehicle only had 12 mi left.  

"By now it was late afternoon. We were really stuck, hungry and heartbroken," Dalbir said. He ultimately had the vehicle towed to a Ford dealership in Elk River and rented a regular gasoline vehicle to complete the family’s trip to Chicago. The family picked up the F150 on their way back to Winnipeg.  

"It was in [the] shop for six months. I can’t take it to my lake cabin. I cannot take it for off-grid camping. I cannot take it for even a road trip," Dalbir wrote. "I can only drive in the city—biggest scam of modern times." He told FOX Business that he believes the government needs to do more to "provide consumers with the right information. 

"People have to make the right choices,” he said. “I want to tell everybody to read my story. Do your research before even thinking about it and make a wiser choice."  

IN THIS ISSUE 

Special focus: Offshore Operations. We are blessed to have seven articles in this month’s lead theme. Among the leading items, a C-Kore author describes an automated cable monitoring system for testing subsea electrical assets. It is an efficient tool that is fast and relatively simple to deploy, compared to downlines or platform-led testing. Meanwhile, authors from Tendeka and Pertamina discuss application of one trip remedial sand control system, offshore Indonesia, while a TCO Group author talks about development and installation of the world's first API 19CI-qualified fall-through protection, non-return retrievable CIV. Other articles include optimizing water management with innovative cleaning techniques; Riserless casing drilling technology in the deepwater top hole interval; Carbon footprint reduction of subsea manifolds; and a look a recent decommissioning projects. 

G&G technology: Machine learning-assisted induced seismicity characterization of the Ellenburger formation, Midland basin. A geophysicist and two data scientists from SLB describe how a hybrid geophysical method enables engineers to understand the relationship between saltwater injection in the Ellenburger formation of West Texas and associated earthquake activity. The innovative combination of technologies provides operators with a reliable earthquake probability map to guide planning of injection wells and avoidance of environmental issues.  

Management issues: Exclusive articles from Saudi Aramco and the Energy Workforce & Technology Council. In the first of these articles, World Oil examines the history and accomplishments of the research arm of Aramco, EXPEC ARC, during its 17-year existence, including a brand-new headquarters building in Dhahran, Saudi Arabia. In the second feature, Council President Molly Determan explains how trade associations lead the industry through collaboration, communication and advocacy. Her organization is celebrating 90 years of industry engagement. 

About the Authors

Kurt Abraham

World Oil

Kurt Abraham kurt.abraham@worldoil.com