TEXAS, USA — Oil is currently being produced in record numbers in the Permian Basin, but the rig count has decreased by 39 compared to this time last year, according to Baker Hughes.
The need for energy remains constant around the world, and it remains a big part of the economy.
Oil continues to pump in the Permian Basin.
“Over about the past decade-and-a-half to two decades, we went from producing less than a million barrels a day of oil in the Permian Basin to now producing more than 6 million barrels a day," said Stephen Robertson, executive vice president of the Permian Basin Petroleum Association.
With that growth, and subsequent revenue, comes a desire and need for more infrastructure.
“With that came a request from several folks out here to try to invest a little bit more back out here in what’s been generating so much of that revenue – try to build better roads, try to invest in electrical transmission distribution infrastructure, try to invest in education to really be able to help take care of the industry that’s been providing so much for so many other people," Robertson said.
Robertson said the lack of pipeline infrastructure is limiting how much of that record production can get to market.
That production is thanks to factors that have also had another impact.
“Part of the conversation absolutely is increased efficiencies and gains in technology, but part of it is also that there is a reduction in rig counts because there is this pressure on this industry – and pressure on really our energy generation opportunities -- to shift away from oil and gas and go in other avenues," Robertson said.
Pressure that is affecting the current outlook.
“That impacts investment in our industry; that impacts long-term planning," Robertson said. "So, if those rig counts don’t kind of turn around – if we don’t at least stabilize if not even increase rig count -- we will see a future where we have lessened production. Hopefully that won’t be the case, but that is something to keep an eye on.”
While that pressure exists, oil continues to reside in a fluid market.
“If the worldwide demand says more oil needs to be produced, then people in the Permian Basin are going to look at their financials -- they’re going to look at what it takes to be able to invest to produce that -- and look to produce it," Robertson said. "We have a tremendous amount of assets out here that are still to be produced – we’re not near the end of the life cycle for this industry out here.”