Despite the crash in oil prices, production has remained relatively stable since 2015. This might lead to the conclusion that companies have found ways to remain just as productive in the new price environment, but detailed analysis has revealed a potential cause: projects approved during pre-2014 prices coming online. However, the drop in oil and gas spending has had a material impact on the production decline for maturing oil fields, where the drilling of new wells has dropped by 50%, according to data from Rystad Energy.
This lower level of activity on already-declining fields has had quite a dramatic impact on decline rates. Mature, offshore oil fields now decline at a rate of -8% per year, whereas the same fields declined by only -5% in 2014, before the drop in drilling activities.
“Old offshore fields are now declining faster, and as a consequence, 1 million bbls of oil have been removed from production balances. This impact cannot be properly accounted for unless you follow old, small fields at a frequent and detailed level,” said Per Magnus Nysveen, Head of Analysis at Rystad Energy.
Global oil and liquids production has reached 97 million bpd as of early October, according to data analysts at Rystad Energy. This is exactly 10 million bbls higher than at the start of this decade. Now the Oslo-based research company predicts a continuous shift of market share from conventional oil production to US shale oil.
“We expect US oil production will continue to ramp-up towards its full potential of 15 million bbls within the next five years, and then we would again see quite a dramatic tightening of the oil market,” said Nadia Wiggen Martin, Vice President of Markets at Rystad Energy.
Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/04102017/rystad-energy-mature-oilfields-are-declining-faster/