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Up to 4 million b/d of downed US oil output being restored


Full output restorations expected by weekend

Up to 18 Bcf/d of natural gas output offline

Cold weather continues in West Texas

  • Author
  • Starr Spencer
  • Editor
  • Richard Rubin
  • Commodity
  • Electric Power Natural Gas Oil

New York — Most of the projected 3 million b/d-4 million b/d of downed US crude oil production, which went offline after power failed and wellheads froze from brutally low temperatures and ice storms Feb. 14-15, could be restored by the weekend, S&P Global Platts Analytics estimated Feb. 16.

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The offline production estimate represented a peak on Feb. 15, although restoration of power and production has already begun.

Roughly 500,000 b/d to 1.5 million b/d may have already been restored by Feb. 16 across the US, much of it in Texas which is the country's largest producing state, Platts Analytics analyst Parker Fawcett said,

"On the gas side, our sample is down over 12 Bcf/d, and in reality maybe 14-18 Bcf/d of production is offline," Fawcett said.

Most affected appears to be the Permian Basin, spanning West Texas and eastern New Mexico, which is the biggest oil basin in the US and also one of the world's largest. The Permian produces about 4.3 million b/d of oil and 16.8 Bcf/d of natural gas.

Wells across Texas, the US' largest producing state, froze after temperatures plunged well below the 32 degrees F. freezing mark, with wind chills even lower, leaving a temporary gap in the country's output profile.

By the most recent production statistics put out by the US Energy Information Administration shows Texas crude output at 4.653 million b/d in November 2020, or about 42% of the US' total oil output of 11.124 million b/d. That is about flat with the previous month.

Big Freeze

But events are fast-changing, as power restorations began even amid the icy temperatures, a top official at a producer organization said, bringing a quick turnaround to operations.

Many upstream operators around Texas experienced what Jason Modglin, president of the Texas Alliance of Energy Producers, called a "total shut-in" from freezing conditions.

They experienced liquids at the wellhead freezing, electricity constraints that limited pumping and natural gas processing facilities or closed icy roads that limited truck transport from pumping services, Modglin said Feb. 16.

Power outages that had occurred Feb. 15 were changing "quickly," he said.

"Operators in the Permian are already reporting the restoration of power, [which] has allowed telecom and utility services at the wellhead to ramp up production and gas processing facilities to come back online," Modglin said. "This production will be critical to resupplying midstream and retail gas suppliers who are drawing on storage reserves to meet customer and electric utility demands."

With situations changing quickly, E&P operators were busy restoring production Feb. 16. But a few acknowledged operating issues from harsh temperatures, ice and wind chills in recent days.

"Due to freezing weather conditions, ExxonMobil's unconventional operations is running at reduced capacity," Todd Spitler, a spokesman for the company, said.

Although conditions in the western part of the Permian Basin were well above freezing Feb. 16, around the Midland-Odessa area – which encompasses the eastern heart of the basin – continued to hover around freezing or the low 30s F, with snow, rain or what the National Weather Service called a "wintry mix" of snow and sleet.

"Wind chills between 5 to minus 10 degrees can be expected for a few hours this morning across the Permian Basin," the weather service said Feb. 16.