Crude Oil

March 11, 2025

CERAWEEK: US oil execs eye CO2 injection, AI to slow looming oil production declines

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HIGHLIGHTS

AI is a step change in productivity: BP CEO

CO2 can double shale recovery: Oxy CEO

US oil production will likely peak later this decade, but technologies like artificial intelligence and CO2 enhanced oil recovery can be used to squeeze as much oil as possible from US reservoirs, oil company executives said March 11.

"We actually see a peak of US production within the next five years or so," Vicki Hollub, CEO of Occidental Petroleum, said at the CERAWeek by S&P Global energy conference in Houston. "We think that between 2027 and 2030, it's likely that the US will see peak production and after that, some decline."

Ryan Lance, CEO of ConocoPhilllips, gave a similar timeline.

"We probably plateau later this decade," Lance said. "It's going to be slow decline beyond that, because there's a lot of resource."

Even with a plateau in production, technology can provide a path to maximize output, Lance said.

"I've never been against this industry in terms of technology because we'll always figure out a way to get more resource out of the rock."

The question is whether technology can deliver absolute growth in production, or whether it will just allow the industry to stay on a plateau for a long time before declining, Lance said. "I think it's probably the latter case, based on what we know today," he said.

S&P Global Commodity Insights analysts expect US crude production to peak at an average of 14.7 million b/d in 2032, up from an average of 13.2 million b/d in 2024.

AI will be the next big way to improve productivity, said Murray Auchincloss, CEO of BP.

Looking at well construction and design, it used to take 10 engineers and 10 contractors six months to design three options for a well, he said. With AI testing underway right now, BP can get hundreds of well trajectories within days, he said.

"So it's just a material step change in productivity," Auchincloss said. "And if you can do it in well design and high pressure, high-temperature wells, you know, you can pretty much do it with anything," he said.

Next, BP plans to use AI to optimize its refineries, he said.

Enhanced oil recovery

Another option to slow the decline in US oil output is CO2 enhanced oil recovery, said Hollub. Oxy is developing a project to directly capture CO2 from the air and then inject the CO2 to boost oil output and sequester the carbon, she said.

"We are advocating so strongly that we use CO2 both in conventional reservoirs and shale reservoirs," Hollub said. "In conventional we've gotten up to more than 75% of the oil in the reservoir out using CO2," she said. "If we had no CO2, recovery would have been less than 50%."

Industry recovers only about 10% of the oil in shale reservoirs today, but pilot tests indicate that using CO2 could double that number, Hollub said. She said using CO2 to extract more oil from shale reservoirs is critical to US energy independence.

"There's no other technology that gets as much incremental out of the reservoir as CO2 does," Hollub said. "The shale revolution was huge for the US. The next thing that's really going to be big ... is to make this CO2 available for both conventional and non-convention all around the country."

The benefit of direct air capture is that it can be located anywhere and does not require a pipeline to transport the CO2 to the site where it will be used, Hollub said.

Deepwater production

Some industry executives also pointed to the resource potential of new developments in the Gulf of Mexico to maintain US production.

"Maybe it's time to go back to exploring the Gulf of America," said Patrick Pouyanné, CEO of TotalEnergies. "I think there is still a good potential there in deepwater Gulf of America. So I would say it's also a way to maintain."

Auchincloss is similarly optimistic about BP's plans in the Gulf.

"We have a fabulous position in the Gulf of America with the Paleogene" Auchincloss said. "We think this is the next great wave of development."

Editor:

Meghan Gordon