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Permian oil operations scaled back amid virus, OPEC uncertainty

  • Post published:March 19, 2020
  • Post category:News

With the price-per-barrel cost of domestic crude hovering slightly above twenty dollars, Permian oil operations have begun to contract, with some companies shutting down production entirely. The spread of COVID-19 and subsequent travel restrictions have stymied the demand for oil and gas in a market that was already heavily supplied. Adding to the problem of overproduction is the current price war between Russian and Saudi Arabia gas producers who have flooded the markets with cheap gas, further driving down the price and straining oil production regions like the Permian Basin. 

Houston-based Apache Corporation announced it would pull all of its oil and gas rigs from the Permian and reduce capital investment by nearly $1 billion to save on short term spending. Although in the short term this means reduced state revenue and fewer jobs for New Mexican oil workers, the decisions to contract operations are being made in an effort to ensure the oil and gas job providers can survive in this business environment. Spokesperson for the New Mexico Oil and Gas Association Robert McEntyre said New Mexico’s industry was well-positioned to emerge from the financial crisis a leader in energy production. Rad more HERE.