Global Oil Production Projected To Boom Despite Opec’s Cut

It seems the global crude-oil production will be on the rise on 2018, and it’s not only because of the output of the United States. The 14 member-countries of the Organization of the Petroleum Exporting Countries (OPEC) have made a deal with several non-members on December 2016 to cut production by 1.8 million barrels per day.

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After the OPEC reached an agreement with non-OPEC oil producers for an extended oil production cut until March 2018, compliance to the pact is not as strict as expected. Russia has recently expressed its concerns about its loss of market share in oil to the United States as President Donald Trump has decided to pull U.S. out of the Paris Agreement. This move by the U.S. could help ease limitations and restrictions on its local fuel sector, which can equate to bigger oil production. And just recently, three Persian Gulf countries have cut ties with Qatar. OPEC also changed its exemptions for Nigeria and Libya as they struggled with internal conflict. Royal Dutch Shell has just lifted force majeure on Nigeria’s Forcados crude, as the country only exports online—the first time in 16 months. Libya has also recently hit its highest oil production even with the brief shutdown of the country’s biggest oilfield, Sharara.

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Even with the cut from OPEC, member-countries are looking for ways to boost their oil industries. After all, even barrels from the U.S. are looking for consumers in Asia and Europe. This dynamic change points out the need for a better resolution from OPEC.

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Oklahoma: Brimming With Oil And Gas Investment Opportunities

According to Fraser Institute, a Vancouver-based think tank’s, Global Petroleum Survey in December 2016, Oklahoma was considered the most attractive place for oil and gas investment.

The study considered several factors that act as barriers to investing in the region, including “high tax rates, costly regulatory demands, political stability, and uncertainty over potential environmental regulations.” Numerous executives in the industry were the respondents.

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The oil and gas industry is showing a decline all over the world. But places like Oklahoma are showing that there is still confidence in the sector, which can boost the growth of and promote investment in the industry.

There are various reasons that Oklahoma is an economically and politically conducive state for oil and gas investment. For one, it is one of the top five in the list of most productive oil- and natural gas-producing states. Four percent of the total U.S. crude oil production is derived from the state, while seven to 8 percent of the country’s marketed natural gas production comes from the Oklahoma.

Another is the abundance of shale formations within state borders. The 3,300-square-mile Ardmore-Woodford formation alone holds 400 million barrels of recoverable petroleum. Operators also have their eyes set on the Mississippian Line formation because of the potential amount of recoverable reserves in the region.

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The use of modern drilling technologies, namely, fracking and horizontal drilling technologies, has also made its way to the state. This provides a more efficient alternative to traditional methods primarily used in Oklahoma.

Cody Winters considers his Oklahoma roots and desire to follow in the footsteps of his grandfather as few of his primary reasons for entering the oil and gas industry. For more articles about the industry, visit this blog.