U.S. Takes Top Spot in Crude Production, with $4.2 Billion in Project Starts in Fourth Quarter

Researched by Industrial Info Resources (Sugar Land, Texas)-- The U.S. seized the crown in global crude oil production earlier this year, according to the U.S. Energy Information Administration's (EIA) Short-Term Energy Outlook. U.S. production surpassed that of Saudi Arabia in February for the first time in more than two decades, and surpassed Russia over the summer for the first time since February 1999. The EIA believes the U.S. will continue to exceed its rivals for the remaining months of 2018 and through 2019. Industrial Info is tracking more than $4.2 billion in active U.S. crude oil production projects that are set to begin construction in the fourth quarter, and nearly $3.2 billion worth that are set to wrap up in the same period.

Click on the image at right for a graph detailing crude oil production in the U.S. from 1994 to the present, versus production in Saudi Arabia and Russia.

Following the revival in oil prices, offshore drilling faced a longer road to recovery than onshore drilling, as it involves more risk and expenses to producers. But Royal Dutch Shell plc's (NYSE:RDS.A) (The Hague, Netherlands) estimated $4 billion Vito Offshore Platform in the Gulf of Mexico, which the company authorized in May and is expected to kick off in the coming months, is one indication that offshore may be catching up; the platform is in an area with depths more than 4,000 feet and up to 300 million barrels of oil equivalent.

Shell expects to begin constructing the four-column semisubmersible, single-train platform with a throughput capacity of 100,000 barrels per day (BBL/d) of crude oil and 100 million standard cubic feet per day of natural gas, from eight subsea wells. Earlier this week, contractor Subsea 7 (Houston, Texas) announced it had selected Oceaneering International Incorporated (NYSE:OII) (Houston) to provide umbilical and flying leads for the deepwater project. For more information, see Industrial Info's project report.

Shell also is planning a $125 million subsea tieback to its Ursa Platform in the Gulf of Mexico, including the delivery, integration and installation of a subsea production system. The company expects the project to improve the efficiency of its work in the Kaikias Field by connecting the existing Ursa Platform to remote operations via pipelines and umbilicals, as opposed to spending billions of dollars on a new platform. The tie-back has a capacity of 120,000 BBL/d of crude oil. For more information, see Industrial Info's project report.

Other subsea projects in the Gulf of Mexico are set to wrap up in the coming quarter, including Chevron Corporation's (NYSE:CVX) (San Ramon, California) $150 million subsea tie-back to the Petronius Platform, which includes a multi-phased booster pump system, in the Dalmatian Oil Field. Equinor ASA (NYSE:EQNR) (Stavangar, Norway) is set to wrap up its estimated $128 million subsea tieback to the Titan Production Platform, for Well No. 5 in the Telemark Field; the project seeks to add an additional 8,000 BBL/d at the Titan Platform, which currently produces 3,500 BBL/d. For more information, see Industrial Info's reports on the Petronius and Titan projects.

Several major producers expect to see onshore exploration programs across the U.S. wrap up at the end of the year, including ConocoPhillips (NYSE:COP) (Houston), which has $500 million worth of annual drilling projects coming to an end:

• $90 million Kuparuk Crude Oil Field offshore Prudhoe Bay, Alaska, which features a pair of rigs that are drilling 10 to 12 new wells; see project report
• $90 million Alpine Crude Oil Field near Nuiqsut, Alaska, which features 17 new wells; see project report
• $85 million Seidel Unit A Crude Oil Lease near Cuero, Texas, which features eight new wells to increase production from the Eagle Ford-2 Field; see project report
• $60 million LL A Jansky A USW Crude Oil Lease near Yorktown, Texas, which features 11 new wells to increase production from Eagle Ford-2; see project report
• $50 million R. Borchardt A Crude Oil Lease near Cuero, Texas, which features nine new wells to increase production from Eagle Ford-2; see project report
• $40 million Rucka Unit A Crude Oil Lease near Ecleto, Texas, which features eight new wells to increase production from Eagle Ford-2; see project report
• $30 million Saunders Unit B Crude Oil Lease near Yorktown, Texas, which features six new wells to increase production from Eagle Ford-2; see project report
• $30 million Butler A-304-Brysch USW D Crude Oil Lease near Nordheim, Texas, which features six new wells to increase production from Eagle Ford-2; see project report
• $25 million Barnhardt Unit B Crude Oil Lease near Cuero, Texas, which features five new wells to increase production from Eagle Ford-2; see project report

ConocoPhillips' Alaska projects are set to wrap up in November, while the Texas projects are scheduled to end in mid-December.

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