US Permian Basin oil production growth slows as fields age

Oil production growth in the US Permian Basin has hit its slowest pace since the COVID-19 pandemic, according to Reuters. Companies are extracting more water and gas per barrel, raising development costs and signaling that America may be approaching peak production levels.

Gas production in the basin has surged eightfold over the past decade, while the water-to-oil ratio is rising, especially in less productive frontier zones. Executives forecast oil production growth could drop 25% this year to 250,000–300,000 barrels per day (bpd), though US government estimates remain slightly higher at 350,000 bpd. Either way, the figures point to a sharp slowdown.

Occidental Petroleum CEO Harold Hamm, a shale industry pioneer, predicts a new era of constraints for the States oil output. He projects domestic crude output will peak between 2027 and 2030 before entering decline, Reuters reports.