FALL AND RISE OF THE US OIL AND NATURAL GAS PRODUCTION

In its January 2020 Short-Term Energy Outlook, the U.S. Energy Information Administration (EIA) forecasts that annual U.S. crude oil production will average 11.1 million b/d in 2021, down 0.2 million b/d from 2020 as result of a decline in drilling activity related to low oil prices. A production decline in 2021 would mark the second consecutive year of production declines. Responses to the COVID-19 pandemic led to supply and demand disruptions. EIA expects crude oil production to increase in 2022 by 0.4 million b/d because of increased drilling as prices remain at or near $50 per barrel (b).
The United States set annual natural gas production records in 2018 and 2019, largely because of increased drilling in shale and tight oil formations. The increase in production led to higher volumes of natural gas in storage and a decrease in natural gas prices. In 2020, marketed natural gas production fell by 2% from 2019 levels amid responses to COVID-19. EIA estimates that annual U.S. marketed natural gas production will decline another 2% to average 95.9 billion cubic feet per day (Bcf/d) in 2021. The fall in production will reverse in 2022, when EIA estimates that natural gas production will rise by 2% to 97.6 Bcf/d.
EIA’s forecast for crude oil production is separated into three regions: the Lower 48 states excluding the Federal Gulf of Mexico (GOM) (81% of 2019 crude oil production), the GOM (15%), and Alaska (4%). EIA expects crude oil production in the U.S. Lower 48 states to decline through the first quarter of 2021 and then increase through the rest of the forecast period. As more new wells come online later in 2021, new well production will exceed the decline in legacy wells, driving the increase in overall crude oil production after the first quarter of 2021.
Associated natural gas production from oil-directed wells in the Permian Basin will fall because of lower West Texas Intermediate crude oil prices and reduced drilling activity in the first quarter of 2021. Natural gas production from dry regions such as Appalachia depends on the Henry Hub price. EIA forecasts the Henry Hub price will increase from $2.00 per million British thermal units (MMBtu) in 2020 to $3.01/MMBtu in 2021 and to $3.27/MMBtu in 2022, which will likely prompt an increase in Appalachia's natural gas production. However, natural gas production in Appalachia may be limited by pipeline constraints in 2021 if the Mountain Valley Pipeline (MVP) is delayed. The MVP is scheduled to enter service in late 2021, delivering natural gas from producing regions in northwestern West Virginia to southern Virginia. Natural gas takeaway capacity in the region is quickly filling up since the Atlantic Coast Pipeline was canceled in mid-2020.
(Source: EIA - Image: Pumpjacks at Placerita oilfield, between Placerita Canyon Road and Golden Valley Road, California in 2013/SCV History)

VESTAS TO REPOWER WINDPLANBLAUW ONSHORE WINDFARM IN THE NETHERLANDS

December 31, 2020

SwifterwinT op Land B.V., a collaboration of more than 170 residents and entrepeneurs in the Netherlands, has placed a 207 MW order for their repowering...

Read More+
LUKOIL REACHES 35 MILLION TONNES OF OIL PRODUCTION IN NORTH CASPIAN SEA

December 31, 2020

Lukoil's cumulative production of oil has exceeded 35 million tonnes at its Yury Korchagin and Vladimir Filanovsky fields in the North Caspian Sea.Lukoil...

Read More+
ENAGAS AND ACCIONA TO DEVELOP GREEN HYDOGEN PROJECT IN MALLORCA

December 31, 2020

Spanish firms Enagás and ACCIONA are moving forward with the Power to Green Hydrogen Mallorca industrial project, having acquired an electrolyser,...

Read More+
AWILCO AND KEPPEL – CONTRACT TERMINATION OF THE CONSTRUCTION OF NORDIC SPRING

December 30, 2020

Awilco Drilling has notified the Singaporean rig builder Keppel FELS that it has exercised its contractual termination right under the newbuilding...

Read More+
OMV PETROM SELLS PRODUCTION ASSETS IN KAZAKHSTAN

December 30, 2020

OMV Petrom, the largest energy company in Southeastern Europe, signed the transaction for the sale of its 100% shareholding in Kom-Munai LLP (KOM)...

Read More+
GE RENEWABLE ENERGY TO SUPPLY TURBINES FOR PHUOC MINH WIND FARM IN VIETNAM

December 30, 2020

GE Renewable Energy announced that it has secured a 27.2 MW contract to supply 8 units of GE’s 3 MW-137 wind turbines to support construction of...

Read More+
KRISENERGY BRINGS CAMBODIA’S MAIDEN ASPARA FIELD ONSTREAM

December 30, 2020

KrisEnergy announced that Cambodia’s first oil field in the offshore Cambodia Block A concession, commenced production on 28 December 2020. The Apsara...

Read More+
ORSTED SELLS 50% OWNERSHIP SHARES OF GREATER CHANGHUA 1 OFFSHORE WIND FARM

December 29, 2020

Ørsted has signed agreements with a consortium comprising global institutional investor Caisse de dépôt et placement du Québec (CDPQ), and Taiwanese...

Read More+
RYSTAD ENERGY – CRUDE OIL SUPPLY DEFICITS TO START IN MAY 2021

December 29, 2020

According to Bjornar Tonhaugen Head of Oil Markets at Rystad Energy, the Covid-19 pandemic has devastated crude and condensate demand in 2021, creating...

Read More+
DUNDAS TITANIUM TO EXTRACT ILMENITE ON A BEACH OF NORTH GREENLAND

December 29, 2020

The Naalakkersuisut, Greenland’s self-rule authority, has granted Dundas Titanium permission to extract ilmenite on the beach of Moriusaq, in northwestern...

Read More+
A.P. MOLLER INVESTS IN GREEN HYDROGEN SYSTEMS

December 28, 2020

Green Hydrogen Systems have obtained investments for a total of approx. EUR 28 million to enable Green Hydrogen Systems to meet the accelerating demand...

Read More+
MHWIRTH – A SUCCESSFUL JOURNEY FROM A MUD PUMP TO STATE-OF-THE-ART DRILLING EQUIPMENTS

December 27, 2020

The birth of MHWirth dates back to 1895 when drilling pioneer Anton Raky founded the “Internationale Bohrgesellschaft Aktiengesellschaft“ (IBG),...

Read More+