The Permian Basin, the largest oil-producing shale play in the US, continues to thrive due to its robust pipeline network and access to export infrastructure. With Europe shifting away from Russian energy exports, US shale oil and gas producers, including those in the Permian Basin, stand to benefit. The upcoming US Presidential election is unlikely to introduce new regulatory measures on shale drilling, supporting the continued growth and consolidation in the sector, exemplified by ExxonMobil’s significant acquisition of Pioneer Natural Resources.
Permian Basin Summary
- The Permian Basin is the largest oil-producing shale play in the US, primarily located in Texas.
- Benefits from a dense network of oil and gas pipelines and access to export infrastructure along the Gulf Coast.
- Crude oil production in the Permian Basin was 5.5 million barrels per day (mmbd) in March 2024.
- Natural gas production in the Permian Basin was 23.1 billion cubic feet per day (bcfd) in March 2024.
- Europe’s shift away from Russian energy exports is expected to benefit US shale oil and gas drillers and LNG producers.
- High inflation concerns and the upcoming US Presidential election make new regulatory measures on shale drilling unlikely.
- Consolidation through mergers and acquisitions (M&A) is strengthening long-term production in the Permian Basin.
- Permit activity in the shale play grew by 1% in the first two quarters of 2024 compared to the same period in 2023, indicating flat short-term growth.
- ExxonMobil’s $64.5 billion acquisition of Pioneer Natural Resources, concluded in June 2024, made ExxonMobil the leader in the Permian Basin, surpassing Occidental and Chevron.
- Detailed analysis of crude oil and natural gas activities in the Permian Basin is available in GlobalData’s new MAR report, “Permian Basin in the US, 2024”.
Conclusion
In conclusion, the Permian Basin continues to solidify its position as the largest oil-producing shale play in the US, benefiting from a well-established infrastructure and favorable market dynamics. The strategic shift by Europe away from Russian energy exports and the stable regulatory environment expected around the upcoming US Presidential election bode well for US shale oil and gas producers. While short-term production growth appears flat, ongoing consolidation through significant mergers and acquisitions, like ExxonMobil’s acquisition of Pioneer Natural Resources, promises to enhance long-term production capabilities. The Permian Basin’s robust output and strategic importance underscore its critical role in the evolving global energy landscape.
