Canadian Oil Sands to Recover More Quickly than US Shale

 
 
Spread the Word
Listed Under

Tag:
Oil Sands

Industry:
Energy

Location:
Wakefield - Massachusetts - US

Subject:
Reports

WAKEFIELD, Mass. - Aug. 20, 2020 - PRLog -- As oil prices stabilize above $30 for WCS and $40 for WTI, production that was curtailed in April and May in response to the COVID-19 price crash is returning in both the Canadian Oil Sands and in the US Shale basins. But according to ESAI Energy's latest North America Watch, while production in the Oil Sands will return to pre-pandemic levels by the end of the year, US shale will be much slower to reach this level until after 2021.

Producers in both regions are finding ways to cut operating costs, the ESAI report notes, and small brownfield project expansions are going forward in the Oil Sands even as spending remains below normal. But as curtailed volumes come back in the major US shale basins, the steep drop in drilling and completion activity over the past few months will begin to bite into shale production. According to ESAI's report, fewer new well completions mean an overall lower base decline moving into 2021, but production growth will stall until more drilling starts in earnest. Higher prices in 2021 will help some new rigs to be deployed, but while fiscal restraint remains at the forefront of operators' budget decisions, rigs additions will not be as rapid as happened in the last downturn. ESAI Energy projects US shale to begin a rebound in the second half of 2021, yet still be down on an annual basis by roughly 160,000 b/d, after an overall decline of 600,000 this year.

Elisabeth Murphy, ESAI Energy's upstream analyst for North America explains that "Canadian Oil Sands has virtually no base decline, so as production is returned online it can ramp up back to previous levels more quickly. The steep decline rates for shale require constant drilling and completion activity, and it will take a while to get production back to pre-pandemic levels."

https://www.esaienergy.com
End
Email:***@esai.com Email Verified
Account Email Address Verified     Account Phone Number Verified     Disclaimer     Report Abuse



Like PRLog?
9K2K1K
Click to Share