North Dakota’s Oil Production Won’t Rebound Until 2022

India in no hurry to seek US nod for oil supplies from Iran, Venezuela
January 19, 2021
Asian Buyers Rush To Secure North Sea Oil After Saudi Surprise Cut
January 19, 2021
Show all

North Dakota’s Oil Production Won’t Rebound Until 2022

Crude oil production in North Dakota, home to the Bakken shale, is not expected to recover to pre-pandemic levels until late into 2022 due to the demand loss and the growing investor pressure on oil producers regarding environmental, social, and governance (ESG) issues, Lynn Helms, director of North Dakota’s Department of Mineral Resources, said this week.

“Producers will be stressed from both ends — the investment end due to ESG and the markets end due to the loss of demand,” Helms said on a webinar on Monday, as carried by Bloomberg.

North Dakota’s oil and gas producers curtailed production in the spring and summer in response to the crash in oil demand and oil prices. North Dakota’s crude oil production plunged by 41.6 percent between December 2019 and May 2020, from 1.5 million barrels per day (bpd) at the end of last year to just 900,000 bpd in May, according to EIA estimates. These suggest that many producers decided to cut production from their existing wells beyond the volume the wells would have naturally declined.

In the summer, producers in North Dakota faced another significant uncertainty—the future operations of the Dakota Access Oil Pipeline, the key pipeline carrying crude out of the Bakken. The uncertainty was stalling oil companies’ plans to invest in bringing back online the output they had curtailed after the pandemic-driven crash in oil demand and prices.

As of December 15, the active rigs in North Dakota were 15, compared to 53 rigs operating at the same time last year, according to North Dakota’s Department of Mineral Resources.

Oil production in September and October 2020 held steady at around 1.22 million bpd, according to the latest available figures presented by Helms on Monday. This is around 300,000 bpd lower than the all-time high monthly production of 1.519 million bpd in November 2019.

“Lower crude oil price has put extreme downward pressure on rig and completion crew counts,” Helms said, adding that unemployment claims indicate some 12,200 layoffs in the industry as of December 11, with more jobs at risk due to oil price volatility.

Leave a Reply

Your email address will not be published. Required fields are marked *

Select Language »
Rate Our Services
close slider

Rate Our Website and / or Training Services

WeCreativez WhatsApp Support
Our GOOGPro team is here to answer your questions. Ask us anything!
Hi, how can I help?