Permian output set to grow 40% by 2030 in final push - report

Quantum Commodity Intelligence – Production in America's largest oil basin will expand 40% by 2030, although the pace of growth is set to decline, according to a Bloomberg survey of four major forecasters.

America's largest oil-producing basin, which spans West Texas and southeast New Mexico, will peak at 7.86 million bpd in 2030, according to the survey, a volume only topped by Saudi Arabia among OPEC members.

However, the outlook comes with several caveats, including only a small increase in the short term, while producers are in no hurry to develop remaining acreage, having enjoyed record profits last year.

Additionally, labour and material shortages have sent costs skyrocketing, while drillers are also mindful of a political swing against shale.

On average, the forecasting firms expect the Permian to add 2.4 million bpd by 2030 versus 2022 levels.

The surveyed forecasters were S&P Global, Rystad Energy, Wood Mackenzie and Enverus.

The report also noted that once the Permian is past its 2030 peak, the rate of decline will be slow, with the basin set to become a supplier for many decades.

For instance, in 2035, Rystad and S&P Global see Permian output 1 million bpd above 2023 levels.

US government forecasts show American production hovering between 12.3 million and 13.3 million barrels out to 2050, noted the report.

The Permian Basin will be the primary driver for US oil growth, with other regions, including Eagle Ford in south Texas and the Gulf of Mexico, stable or declining.