U.S. oil drillers to pivot from shale to offshore projects, EIA reports

David Wethe and Devika Krishna Kumar, Bloomberg October 16, 2023

(Bloomberg) – The latest evidence of a pivot by oil operators from U.S. shale to offshore appeared Monday as the U.S. Energy Information Administration warned that a drop in onshore production is accelerating into November.

After revising its own figures from previous months, a decline in oil output is now expected to gain speed in every month from September through November, when combined production from the seven biggest shale fields will fall to 9.6 MMbpd, according to Monday’s report by the U.S. agency. The Permian basin of West Texas and New Mexico continues to lead the contraction.

Reports of a shrinking shale patch come as total U.S. output soared to a record 13.13 MMbpd last quarter. U.S. Gulf oil production was almost 2 MMbpd in July, according to the most recent data available. That’s up 4% from the previous month and marks an 11.7% jump from the same period a year earlier.

As shale growth slows, deepwater drilling is enjoying a renaissance, with more than $500 billion in global offshore investments expected through 2025, according to the oilfield services giant SLB.

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