Pioneer CEO says U.S. oil output could drop 20% on shale retreat

By Kevin Crowley and Alix Steel on 3/16/2020

HOUSTON (Bloomberg) - America’s oil output could drop nearly 20% as shale drillers slash capital spending and reduce activity after the biggest crash in crude prices since 1991, according to one of the country’s biggest independent producers.

The U.S. may lose between 2 million and 2.5 million barrels a day by the end of 2021 if oil prices stay around current levels as companies go into “maintenance mode,” Pioneer Natural Resources Co. Chief Executive Officer Scott Sheffield said in an interview on Bloomberg TV. His forecast is similar to that of Oslo-based research firm Rystad Energy.

Most shale producers will be forced to cut as many as half of their drilling rigs by the end of this year, when current hedges expire, Sheffield said. He didn’t provide details of his own company’s plans, which he said he’ll announce in the coming days. Sheffield said he has no plans for layoffs after a major restructuring last year.

The oil-price collapse may end up wiping out enough companies and production globally that it could create a shortage of crude, leading to higher prices after 2022, Sheffield said.

“It’s going to be hard to ramp up production anywhere in the world, so we could have a two- or three-year super cycle between $60 and $100 oil at that point in time,” he said.

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