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Released January 15, 2021 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Things will get worse before they get better in the U.S. Oil & Gas Production Industry. The U.S. Energy Information Administration (EIA) forecasts domestic crude oil and natural gas will continue their production declines in 2021, albeit at a much slower pace than the catastrophic drops in 2020, before reviving in 2022. Industrial Info is tracking more than $3.2 billion worth of crude oil and natural gas production-related projects that are set to kick off across the U.S. in the first quarter, with the bulk attributed to oil.
A dip in crude oil production in 2021 would mark the second consecutive year of declines, according to the EIA, which expects to see annual production drop from 11.3 million barrels per day in 2020 to 11.1 million barrels. Natural gas producers, meanwhile, saw record U.S. production in 2018 and 2019, only to tumble 2% from 2019 levels amid responses to COVID-19 in 2020; the EIA expects 2021's marketed production to drop another 2%, averaging 95.9 billion cubic feet per day.
Click on the image at right for an EIA graph detailing monthly U.S. crude oil production from 2012 through projections for 2022.
Offshore oil production is the top destination for first-quarter spending, with several projects attributed to Royal Dutch Shell plc (NYSE:RDA.A) (The Hague, Netherlands). The energy giant is preparing $50 million in platform modifications at its Olympus project in the Gulf of Mexico, to support the planned production from the Power Nap field development, and is readying for a $50 million drilling program with a single well. Both projects are in the Mississippi Canyon Oil Field. For more information, see Industrial Info's project reports on the platform mods and drilling program.
Onshore oil production accounts for a much smaller share of the first-quarter's projected kickoffs. Two of these projects are in North Dakota's Bakken Shale area: Hess Corporation's (NYSE:HES) (Houston, Texas) estimated $20 million expansion at the Hawkeye Central Crude Oil Facility in Keene, which has dealt with years of delays and is highly tentative, and Equinor's (NYSE:EQNR) (Stavanger, Norway) estimated $5 million crude oil conditioning and transfer station in Williston.
The latter project also is on shaky ground, as Equinor is considering a sell-off of its Bakken-based assets. Equinor wrote off $2.9 billion in the third-quarter of 2020, including $1.4 billion in the United States, after cutting its long-term oil and gas price forecasts, according to Reuters. For more information, see Industrial Info's reports on the Keene and Willison projects.
On the natural gas side, California Resources Corporation (NYSE:CRC) (Santa Clarita, California) and Royale Energy Incorporated (NASDAQ:ROYL) (San Diego, California) are hoping to kick off an estimated $15 million drilling program in the Rio Vista Field near Byron, California, by installing 10 wells to produce natural gas from multiple stacked-gas reservoirs. California Resources Corporation heard some good news in October, when a federal judge approved its reorganization plan to exit Chapter 11, just three months after it filed for bankruptcy protection. For more information, see Industrial Info's project report.
Northern Natural Gas Company (Omaha, Nebraska), which Berkshire Hathaway Incorporated (NYSE:BRK.A) (Omaha, Nebraska) acquired last year from Dominion Energy (NYSE:D) (Richmond, Virginia), is considering an estimated $14.9 million equipment replacement at an LNG peak shaver facility in Wrenshall, Minnesota. Peak shaving stores surplus liquefied natural gas (LNG) to be used during periods with peak demand. These facilities have become particularly important in meeting LNG demand for small-scale applications, such as power generation at individual industrial plants. The company plans to replace a trio of heavily aged vaporizers. For more information, see Industrial Info's project report.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
A dip in crude oil production in 2021 would mark the second consecutive year of declines, according to the EIA, which expects to see annual production drop from 11.3 million barrels per day in 2020 to 11.1 million barrels. Natural gas producers, meanwhile, saw record U.S. production in 2018 and 2019, only to tumble 2% from 2019 levels amid responses to COVID-19 in 2020; the EIA expects 2021's marketed production to drop another 2%, averaging 95.9 billion cubic feet per day.
Click on the image at right for an EIA graph detailing monthly U.S. crude oil production from 2012 through projections for 2022.Offshore oil production is the top destination for first-quarter spending, with several projects attributed to Royal Dutch Shell plc (NYSE:RDA.A) (The Hague, Netherlands). The energy giant is preparing $50 million in platform modifications at its Olympus project in the Gulf of Mexico, to support the planned production from the Power Nap field development, and is readying for a $50 million drilling program with a single well. Both projects are in the Mississippi Canyon Oil Field. For more information, see Industrial Info's project reports on the platform mods and drilling program.
Onshore oil production accounts for a much smaller share of the first-quarter's projected kickoffs. Two of these projects are in North Dakota's Bakken Shale area: Hess Corporation's (NYSE:HES) (Houston, Texas) estimated $20 million expansion at the Hawkeye Central Crude Oil Facility in Keene, which has dealt with years of delays and is highly tentative, and Equinor's (NYSE:EQNR) (Stavanger, Norway) estimated $5 million crude oil conditioning and transfer station in Williston.
The latter project also is on shaky ground, as Equinor is considering a sell-off of its Bakken-based assets. Equinor wrote off $2.9 billion in the third-quarter of 2020, including $1.4 billion in the United States, after cutting its long-term oil and gas price forecasts, according to Reuters. For more information, see Industrial Info's reports on the Keene and Willison projects.
On the natural gas side, California Resources Corporation (NYSE:CRC) (Santa Clarita, California) and Royale Energy Incorporated (NASDAQ:ROYL) (San Diego, California) are hoping to kick off an estimated $15 million drilling program in the Rio Vista Field near Byron, California, by installing 10 wells to produce natural gas from multiple stacked-gas reservoirs. California Resources Corporation heard some good news in October, when a federal judge approved its reorganization plan to exit Chapter 11, just three months after it filed for bankruptcy protection. For more information, see Industrial Info's project report.
Northern Natural Gas Company (Omaha, Nebraska), which Berkshire Hathaway Incorporated (NYSE:BRK.A) (Omaha, Nebraska) acquired last year from Dominion Energy (NYSE:D) (Richmond, Virginia), is considering an estimated $14.9 million equipment replacement at an LNG peak shaver facility in Wrenshall, Minnesota. Peak shaving stores surplus liquefied natural gas (LNG) to be used during periods with peak demand. These facilities have become particularly important in meeting LNG demand for small-scale applications, such as power generation at individual industrial plants. The company plans to replace a trio of heavily aged vaporizers. For more information, see Industrial Info's project report.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
