Arctic Air Freezes Permian Shale Fields

By -

 


For the past few days, many states have been severely affected by an Arctic cold front. Out of all of the states, Texas seems like the one being hit the hardest. Some areas of Texas have gone as low as 0F, something unheard of for the past 30 years.


U.S. oil production has dropped by more than 2 million barrels a day (the equivalent of about 18% of overall U.S. crude production) as freezing weather brings to halt key producing states that have never had to deal with freezing Arctic blasts. The Permian Basin, the most profitable U.S. oil production region, is the one affected the most by the Arctic weather since its located in west Texas and southeast New Mexico. Production cuts were also significant in the Eagle Ford, located in southern Texas, and the Anadarko basin in Oklahoma.




Since the start of the Arctic cold snap, oil prices have fallen slightly because most refineries have closed due to the cold, reducing the amount of crude needed right now. One company benefiting from this is West Texas Intermediate, which was able to push the crude benchmark above $60 a barrel because of the Permian oil outage. Fortunately, experts anticipate the overall oil production get back on its feet later this week as temperatures return to normal.



Why Did the Permian Shale Field Freeze?



The Bakken basin in North Dakota has continued its production despite the Arctic weather, but why did the Permian basin freeze?

The materials used in the Permian aren’t built to withstand freezing temperatures, as the last time this happened was over 30 years ago. Flow lines, which link individual wells to collecting centers, are laid above the ground rather than under, making them more susceptible to freezing weather. 


The low temperatures have already caused equipment breakdowns at multiple natural gas processing plants in the Permian and even some in the Anadarko basin in Oklahoma. Small oil producers in the Permian basin and nearby shale regions pick up crude every few days using trucks, but this cold weather makes it hard for transports to get out, forcing them to close wells. Once the cold weather subsided, the technicians will be able to prepare the equipment for future Arctic temperatures, to avoid another shutdown like the one that occurred recently.


Preparation Is Key for the Next Arctic Storm


As the weather continues to change, oil producers will need to prepare their equipment for any sort of extreme weather. This will avoid future problems and ensure that the production is not interrupted. 


Did you enjoy this article? If so, remember to subscribe and follow our website so you can stay up to date on the latest shale and natural gas news! 



Coalatree

Popular posts from this blog

Fracktivist in Dimock Releases Carefully Edited Video, Refuses to Release the Rest

By -
Image
From Energy in Depth: There is something very strange going on along Carter Road, in Dimock, Pennsylvania, and I’m not speaking of natural gas, methane migration, contamination, litigation or even the extensive water testing there by the EPA and others.  No, I’m talking about a new “Watergate” conspiracy, complete with 18 minutes of missing tape (well, video, actually). It seems the ever-present Green Party member and  naturist   Vera Scroggins  (a/k/a  Vera Duerga ) has posted a video of Craig Sautner meeting with the EPA.  Mysteriously, the video is but 14 seconds in length, cutting off conversation in what is obviously mid-stream.  It raises a question Craig Sautner, like  Ronald Reagan in Kings Row , might have asked, “Where’s the rest of me?’  Carter Road, isn’t Kings Row, of course, (at least not until you arrive at  the mansion Scott Ely, one of the Dimock litigants, is building with his royalty money ), but there appears to be a whole lot of film editing going on there to fi
Read more

The Second Largest Oil and Gas Merger - Cabot and Cimarex

By -
Image
       Due to investor pressure, the U.S shale drillers are being pushed to improve financial and operational performance after a few years of poor returns. Even though the industry has improved its numbers, when compared to last year, investors still want more to be done for them to earn more money.      That's why two mid-tier shale drillers, Cabot and Climarex, have decided to merge in order to eliminate $100 million in annual costs, which means more money for the investors. This all-stock transaction is valued at about $7.4 billion, which is relatively high for the oil and gas sector.      The new entity will be renamed and the headquarters located in Houston, Texas. Cabot shareholders will own 49.5 percent of the new entity, and Climarex the rest.       The Cimarex-Cabot merger will address the investor's demand for a higher amount of returning cash. The initial plan is to pay a 50-cent-per-share special dividend on closing the deal while offering a quarterly variable div
Read more

Is a Strong Oil Demand Expected This Year?

By -
Image
  According to the world's largest oil traders, global oil demand is set for a rebound. Between now and the end of 2022, global consumption is expected to increase by up to 8 million barrels each day. Vitol Group, the world's largest oil trader, supports this statement.  In an interview with Bloomberg, Vitol's chief executive Russell Hardy said, "We'll need all eight cylinders to get through 2022". This, of course, is due to the lower than average demand for oil at the moment. Reopening economies and Asian markets will create a strong demand rebound by the end of this year and in 2022.  Although the demand for jet fuel will slowly increase, it will still be below average at the end of the year. Nevertheless, a surge in petrochemicals will offset the expected delay in jet fuel demand. Last year, the oil surplus reached a record of 1 billion barrels. This excess is already more than halfway drained, and experts believe it will be depleted by the third quarter th
Read more