Permian Seen Second to Saudis for Spare Oil-Output Capacity

February 4, 2018

The U.S.'s Permian Basin is looking like Saudi Arabia, with as much as 1 million barrels of spare oil capacity ready to go into production, according to Nansen Saleri, former head of reservoir management at Saudi Aramco, the world’s largest crude exporter.

Oil producers in the Permian Basin have at least a combined 500,000 barrels a day of idle oil production capacity, according to Saleri, who is now chief executive officer of Houston-based consultant Quantum Reservoir Impact. Saudi Arabia's spare capacity is about 1.5 million barrels a day, according to data compiled by Bloomberg.

The Permian Basin of Texas and New Mexico is the engine for U.S. shale production and acquisitions, helping to increase U.S. output to more than 10 million barrels a day in November for the first time in more than four decades. Exxon Mobil Corp. is spending billions to triple output by 2025 from the Permian, where its costs are as low as $15 a barrel.

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