Issue: February 2024
2024 Forecast and Review
Worldwide E&P spending is set to increase 5% in 2024, decelerating from 11% in 2023, with the global upturn extending into a third year. North American spending growth should moderate to 2.2% in 2024, following 19% growth in 2023. The majority of spending increases have shifted to international and offshore markets.
Despite a 4.6% reduction in U.S. drilling activity on an average yearly basis, U.S. crude production climbed to an all-time high of 12.93 MMbopd in 2023, an 8.8% increase compared to the 11.88 MMbopd average of 2022. The increased output was augmented by U.S. operators completing a large backlog of DUCs in three major oil shale plays.
The U.S. industry faces formidable challenges. In November 2024, elections for President, the Senate, and the House may change the political landscape to something more favorable. Irrespective, the Biden administration will be in office at least through January 2025, and the next 11 months will be a trying period.
Look for U.S. spending to increase just 2.2% in 2024, and drilling should be flat. Many factors are at play to bring this result.
Active natural gas wells saw a slight increase in the U.S. during 2023 of 0.9%, to 496,756 total wells, compared with 492,197 in 2022. Accordingly, total marketed gas production in the U.S. also saw an increase.
Despite escalating tensions in the Middle East, a significant OPEC+ output reduction and the war in Ukraine, crude prices fell in 2023, with WTI down 17.7% to average $77.60/bbl, $16.73/bbl less than the $94.33/bbl average for 2022.
At one point, 2024 was shaping up to be the Canadian oil patch’s big comeback year. But price volatility and a federal government that singles out fossil fuels in its climate crusade have plunged the industry into greater uncertainty and dimmed hope that Canada might again step to the international hydrocarbons forefront.
As operator spending shifts away from the U.S., six of eight regions will post drilling increases. That being said, some areas—Middle East, Africa and South America—will do better than others, and most gains registered will be modest.
Features
A new AI-driven solution provides insights that enable rig personnel to act earlier and more confidently, reducing risks and improving well delivery.
In the fast-paced world of upstream oil & gas data, innovation and a relentless focus on continual improvement is not a choice but a necessity.
The history behind CEM (Corrosion-Erosion Monitor) is a story of how failures can lead to success. Acoustic guided waves were the solution necessary to achieve reliable wall thickness monitoring of pipes.
Columns
We all want clean air and water. We all want to be good stewards of our land and natural resources. And over the last 50 years, America has proven that oil and gas production and a clean environment are not mutually exclusive.
If you like stability, you’ll love 2024
Water quality and quantity
Saudi Arabia suspends oil expansion as neighboring producers plan to raise output
Recent developments with produced water
Wildcat wells netting smaller discoveries
