For oil and gas, bull’s-eye drawn on Per­mian Basin

South Florida Sun-Sentinel (Sunday) - - People On The Move - By Su­san Mon­toya Bryan

AL­BU­QUERQUE, N.M. — Some of the largest en­ergy com­pa­nies in the U.S. have al­ready in­vested bil­lions of dol­lars on claims up and down the Texas-New Mex­ico state line, tap­ping one of the na­tion’s rich­est and most pro­lific oil and nat­u­ral gas re­gions.

Now the stakes just got higher, as the U.S. Ge­o­log­i­cal Sur­vey re­leased a new assess­ment this month that shows por­tions of the Per­mian Basin could hold even more prom­ise.

With the po­ten­tial to dou­ble the na­tion’s on­shore oil and gas re­sources, the agency es­ti­mates more than 46 bil­lion bar­rels of oil and some 280 tril­lion cu­bic feet of gas are within two for­ma­tions on the south­west­ern side of the basin. That’s the largest con­tin­u­ous oil and gas re­source po­ten­tial ever as­sessed.

While agency ge­ol­o­gists cau­tion that more study would be needed to de­ter­mine the profitabil­ity of go­ing after the re­sources, in­dus­try groups and top of­fi­cials within the Trump ad­min­is­tra­tion are en­cour­aged and say the assess­ment un­der­scores the ac­tiv­ity that’s al­ready hap­pen­ing in the basin.

“Be­fore this assess­ment came down, I was bullish on oil and gas pro­duc­tion in the United States,” In­te­rior Sec­re­tary Ryan Zinke said in a state­ment. “Now, I know for a fact that Amer­i­can en­ergy dom­i­nance is within our grasp as a na­tion.”

The an­nounce­ment comes as OPEC coun­tries voted last week to cut global oil pro­duc­tion by 1.2 mil­lion bar­rels a day be­gin­ning next year as a way to force crude oil prices higher de­spite po­lit­i­cal pres­sure from Pres­i­dent Don­ald Trump.

The group of oil-pro­duc­ing na­tions was look­ing to rein in sup­ply as prices had fallen about 25 per­cent be­cause ma­jor pro­duc­ers, in­clud­ing the U.S., have been pump­ing at high rates.

Stephen Robert­son, ex­ec­u­tive vice pres­i­dent of the Texas-based Per­mian Basin Pe­tro­leum As­so­ci­a­tion, said the signs for the basin’s po­ten­tial have been there for a long time.

“The fact is that Reeves County, which in the heart of that play, is run­ning more rigs than any other county in the na­tion and has been do­ing that for quite a while,” he said.

“The peo­ple out here know that it’s there and it re­ally is that im­prove­ment of the tech­nolo­gies and the in­creased ef­fi­cien­cies al­low­ing peo­ple the abil­ity to ac­tu­ally be able to ac­cess it and pro­duce it.”

Still, a main fac­tor is price. “If the price drops to a point where it’s not eco­nom­i­cal, then it doesn’t mat­ter if it’s there. It’s not go­ing to be pro­duced,” Robert­son said.

New Mex­ico’s share of the Per­mian Basin has helped to drive pro­duc­tion in the state to record lev­els in 2017.

This year is ex­pected to be an­other ban­ner year as in­dus­try of­fi­cials say the state is on pace to sur­pass 200 mil­lion bar­rels.

Dale Jan­way, mayor of the south­east­ern New Mex­ico city of Carls­bad, told The As­so­ci­ated Press that with the news of more re­sources in the Per­mian comes greater re­spon­si­bil­ity.

“We know that we need to re­dou­ble our ef­forts to im­prove and de­velop in­fra­struc­ture in the area and to work closely with the county, state and our busi­ness part­ners to best pre­pare for the fu­ture. We’re in it for the long haul,” he said.

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