Saudi Arabia wants to get oil prices near $80 a barrel to pay for the government’s crowded policy agenda and support the valuation of state energy giant Aramco before an initial public offering.
In conversations with OPEC delegates and oil market participants, Saudi officials had been careful to avoid pinpointing an exact price target. Yet people who have spoken to them said the inescapable conclusion from the conversations was that Riyadh is aiming for $80.
I wonder what's Saudi Arabia's and OPEC's plans for dealing with the US fracking industry? Some of the companies demonstrated that they can still be profitable below $40 per barrel, ramp up/down production in days, and build new fracking setups within weeks.
Efficiencies spurred by the battle with OPEC - including faster drilling, better well designs and more fracking - helped U.S. firms produce enough oil to successfully lobby for the repeal of a ban on oil exports.
“We continue to see and drive improvements” in drilling speed and efficiency, said Mathias Schlecht, a technology vice president at Baker Hughes, General Electric Co’s oilfield services business.
New wells can be drilled in as little as a week, he said. A few years ago, it could take up to a month.
The next phase of shale output growth depends on techniques to squeeze more oil from each well. Companies are now putting sensors on drill bits to more precisely access oil deposits, using artificial intelligence and remote operators to get the most out of equipment and trained engineers.
Higher prices - up about $10 a barrel in the last two months - also may encourage the industry to work through a backlog of some 7,300 drilled-but-uncompleted shale wells that have built up because of crew and equipment shortages.
Submitted April 10, 2018 at 09:39PM by COMPUTER1313 https://ift.tt/2v3IBiH
