Permian basin seen growing to largest oil patch in the world

By Jessica Summers and Sheela Tobben on 4/24/2018

NEW YORK (Bloomberg) -- The Permian shale play is all about setting records. Now, the region will probably become the world’s largest oil patch over the next decade.

Output in the basin is forecast to reach 3.18 MMbpd in May, according to the Energy Information Administration. That’s the highest since the agency began compiling records in 2007. The size of the oil deposits coupled with increased technology and efficiency are fueling the rampant growth.

“The technology is the biggest driver,” said Rob Thummel, managing director at Tortoise, which handles $16 billion in energy-related assets. “The basin in and of itself could end up being the largest oil field in the world."

By contrast, top-producing members of OPEC such as Iran and Iraq pump less than 5 MMbpd. Iran produced about 3.81 MMbpd in March, according to data compiled by Bloomberg.

“If the Permian was part of OPEC, it would be the fourth-largest OPEC member, right behind Saudi Arabia, Iran and Iraq,” Thummel said. “By the end of the year, the Permian probably overtakes Iran.”

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