Eagle Ford, Permian fueling 'greatest comeback story'
By Jennifer Hiller San Antonio Express-News
April 23, 2014 at 4:46 p.m.
SAN ANTONIO - By the end of this year, Texas' oil production could exceed the output of every OPEC country but Saudi Arabia.
The state's production, driven mainly by the Eagle Ford Shale in South Texas and Permian Basin in West Texas, will reach about 3.4 million barrels per day, propelling Texas past Iraq and Iran, said Greg Leveille, manager for technology program-unconventional reservoirs at ConocoPhillips.
Among non-OPEC countries, only Russia, the United States as a whole, China and Canada would exceed Texas' oil production, making the state the world's sixth-largest producer.
"This is the greatest comeback story you can possibly imagine," Leveille said this week at the Eagle Ford Consortium conference here.
He said the high crude oil content of the Eagle Ford and the high level of returns that ConocoPhillips and other operators are seeing mean it has the greatest potential of all U.S. shale fields.
"The Eagle Ford is by far the most important unconventional reservoir play in North America today," Leveille said.
The ConocoPhillips forecast set the stage for this week's conference, where talk turned to the future of the Eagle Ford, the potential for oil and gas production in neighboring Mexico and sustainable development - basically the idea that no one in South Texas wants to end up living in a post-bust ghost town.
"Everybody talks about the boom and bust," said Leodoro Martinez , head of the Eagle Ford Consortium, a group of elected officials, companies and residents. "We want to talk about the boom without having a bust."
Leveille said the region would see "decades and decades of production." ConocoPhillips in the past year has added 1,000 planned drilling locations. It now plans 3,000 wells on 221,000 acres in the Eagle Ford, where it's running 12 rigs and will spend $3 billion this year. It isn't the only company ramping up drilling.
The Texas Alliance of Energy Producers estimates are slightly less optimistic than Leveille's, but also point to surging crude oil production. The industry group estimates the state's crude oil production climbed to 2.7 million barrels per day by the end of 2013 and will cross the 3-million mark before the end of this year.
While it's difficult to find perfect comparisons of world oil production, the group's estimate puts Texas ahead of Iraq, which produced just less than 3 million barrels of crude oil and condensate in 2012, according to the U.S. Energy Information Administration.
Texas oil production peaked in the early 1970s and went on a long slide, including a 1980s bust that devastated the state's economy. A few years ago, before shale-oil drilling started, the state produced about 1 million barrels per day, about as much as Ecuador, Leveille said.
The boom has brought a host of major concerns - including road damage, wrecks, a lack of health care services and heavy water consumption - as well as smaller issues that are changing the culture of the region.
There's also a growing sense that rural South and West Texas need to band together to get the attention of the Legislature.