Direct oil and gas employment in the Permian Basin doubled in the 10-year period between 2009 and 2019 as part of the shale-led resurgence, the Texas Independent Producers and Royalty Owners Association said in a new report.
The association, or TIPRO, said in the report that the 63 counties in Texas and New Mexico that make up the Permian had direct oil and natural gas employment of around 45,000 jobs in 2009. As shale oil and gas production brought a renaissance to the famous region, that number jumped to 87,603 in 2019.
But the trade group cautioned that the rapid growth will likely begin to slow as market forces come into play.
"Since 2009, oil production in the region has increased from less than 1 million barrels per day … to more than 4 million bbl/d in 2019, with some forecasting oil production to nearly double by 2023," TIPRO said. "In 2019, the United States also officially became the largest producer of oil and natural gas in the world, with the Permian Basin surpassing Saudi Arabia's Ghawar field to become the top producing oilfield."
Over the course of the 10-year period between 2009 and 2019, TIPRO said oil production had increased by 1.2 billion barrels, an increase of 371%. Gas production increased by 3.6 Tcf, a jump of 217%. The organization said that six West Texas counties had oil production of more than 100 million barrels over the 10-year period.
Even though a number of independent producers active in the region told investors in the third quarter of 2019 that they would start to slow their production growth, production in the Permian was still strong last year. TIPRO said oil production increased by 255 million barrels from 2018 to 2019, reaching a record 1.5 billion barrels. Natural gas production increased by 1.1 Tcf year over year, to 5.3 Tcf.
The report warned that the anticipated slowdown will likely come to pass in 2020. TIPRO said a number of potential geopolitical issues, along with independents changing their business plans to emphasize shareholder returns over growth, could mean Permian production slackens this year.
"Despite substantial gains in oil and gas output, several issues impacted domestic energy production levels in 2019, including takeaway capacity limitations in West Texas, an escalating trade war with China, and capital constraints, which forced more operators to adopt a cash flow yield model and scale back spending on drilling projects," TIPRO Chairman Eugene Garcia said.