Posted on March 3, 2019
Report shows plenty of oil and jobs to be produced by 2025
Oil production in the Permian Basin will increase to more than 6 million barrels a day by 2025, which would be the fourth most in the world, according to a presentation from the Permian Strategic Partnership.
The PSP provided an update for the Midland City Council on Tuesday about its expectations for growth in the Permian – and therefore Midland – before the council’s regularly scheduled meeting. PSP representatives said current production inside the Permian is around 3.5 million barrels a day. That means the area in West Texas and southeast New Mexico would rank eighth in the world. The rest of the United States, according to statistics provided, produces 6.8 million barrels. Russia with 11 million barrels and Saudi Arabia with 10.5 million barrels are first and second on the list.
“History is being written in West Texas and southeast New Mexico,” said Michael Wise, executive vice president of the Permian Strategic Partnership.
The PSP report also indicates that such production would result in a gross value of oil and gas at the wellhead of more than $200 billion a year by 2025 and the possibility of generating more than $120 billion in state severance tax and about $5 billion for “local county governments through 2030.”
Lastly, the report shows an impact on the workforce across the region. “Permian production will support the creation of about 45,000 jobs across the region through 2023,” according to the report. That number jumps to 60,000 “if you include the current workforce shortage.”
“Permian oil and gas production represents a generational opportunity for Texas and New Mexico as a region,” the PSP report states. “Realizing this opportunity will require significant investments.”
That investment is one reason the Permian Strategic Partnership was created in the first place. In November, PSP officials announced their intention to provide more than $100 million over the next several years as seed money to spur additional private sector investment. At the time, the PSP was made up of 17 leaders of major energy companies operating in the Permian Basin. On Tuesday, PSP officials said that number had grown to 20 of the largest regional producers and global service companies.
The PSP’s research, interviews and surveys have helped officials to establish three strategic priorities:
–sharing perspective on industry growth to help elected leaders, administrators, local entrepreneurs and their stakeholders prepare for changes;
–collaborating with stakeholders across the region to improve the PSP’s understanding of the current state and can be done together to improve it; and
–serving as an advocate, partner or leader in initiatives that will improve the quality of life and the long-term economic potential of communities in the Permian Basin.
The PSP has identified five focus areas that must be addressed to help the Permian live up to its potential: public education, roads, housing, health care and workforce.
PSP member companies are: Anadarko, Apache, BPX Energy, Chevron, Cimarex, Concho, ConocoPhillips, Devon, Diamondback, Encana, Endeavor, EOG Resources, Halliburton, Occidental, Parsley, Pioneer, Plains All American, Schlumberger, Shell, XTO Energy