Middle East

Oil companies forecast a rise towards 2022

U.S. oil and gas executives predict higher production and drilling activity as oil prices rise next year, but costs are significantly higher, according to a poll released Wednesday by the Federal Reserve Bank of Dallas. It says it will rise.

Approximately 49% of the executives surveyed said they were aiming to increase production next year, 15% said they would focus on maintaining existing production levels, and 13% would focus on debt reduction. I did. The six-month outlook remained good, but the index fell from 58.9 in the previous quarter to 53.2.

Executives of listed oil companies said they are primarily planning to level off production next year or increase production in the low single digits and focus on improving shareholder returns.

US oil prices rose 1.2% on Wednesday to about $ 76.88 per barrel. Demand for oil and automotive fuels has recovered due to the economic recovery from the coronavirus pandemic, which has increased by almost 60% since the beginning of the year.

Service company input cost indicators rose from 60.8 in the previous quarter to 69.8, a record high in the survey. Oilfield services companies reported higher costs in the fourth quarter, and lease operating costs surged from 29.4 in the quarter to 42. This is also the highest since the Federal Reserve began its investigation five years ago.

“Supply chain disruptions and the resulting rise in inflation can delay and impact the activities of excavation and completion in 2022,” said one executive. Others have said it is difficult to find good workers.

Survey respondents predict that on average, December next year, oil prices will be $ 75 a barrel and Henry Hub natural gas prices will be $ 4.06 per million British thermal units (MMBtu), both at current prices. close.

In the special question section, 95% of respondents said they did not expect countries to fulfill their 2030 commitment to reduce greenhouse gas emissions.

Many executives also said the uncertainty about the Biden administration’s energy policy made planning difficult.

The December survey included executives from 134 energy companies in Texas, southern New Mexico, and northern Louisiana. Of these, 90 are exploration and production companies and 44 are oil field service companies.

(Reuters report by Liz Hampton of Denver, edited by Kevin Riffy)

https://www.oedigital.com/news/493180-looking-ahead-to-2022-oil-firms-predict-rising-output-higher-costs Oil companies forecast a rise towards 2022

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