Shale Oil

On Aug. 25, China's news agency Xinhua reported that a shale formation with an estimated 1.27MM mt (9.03MM bbl) of oil was discovered in the onshore Daqing Oilfield, where China National Petroleum Corp. (CNPC) has been looking to increase shale output.

According to the EIA's monthly drilling productivity report released on Aug. 16, US shale output is set to rise to 8.10MM b/d next month, the highest monthly US shale output since last April.

Major producers in the Permian Basin shale play, including Chevron Corp., ExxonMobil Corp., and Pioneer Natural Resources Co., have all announced plans to boost oil output from their assets in the play over H2 amid increasing oil demand and prices.

Bloomberg New Energy Finance (BloombergNEF) surveyed 50 shale drillers, and they are expected to post losses of almost $12.0B this year due to hedging activity that is now proving to be a poor decision considering the ongoing recovery in oil demand and prices.

As Canada commits to attaining net-zero GHG emissions by 2050, upstream and downstream firms as well as midstream operators have been working on their compliance plans.

According to the Norwegian consultancy, US oil production will average 11.51MM b/d this month, up 60K b/d from June output, and will remain at that level through Aug.

Devon Energy Inc. has become the second US oil firm after Occidental Petroleum Corp. to announce a target of achieving a 50% reduction in Scope 1, which come directly from operations, and Scope 2, which come from purchased power, GHG emissions by 2030 on the way to net-zero Scope 1 and 2 emissions by 2050.

The Dutch commodities trading firm has partnered with Latin American independent Vista Oil & Gas in a $250MM integrated drilling project in Argentina's Vaca Muerta shale formation for the development of 20 wells in Vista's Bajada del Palo Oeste concession, where Vista currently operates 28 drills with production of about 24K b/d.

With oil prices continuing to rise amid growing demand and continued supply restraint from OPEC+, US shale producers are seeing a significant uptick in free cash flow, which is resulting in these firms beginning to boost spending.

The global oil-price collapse in 2015 had taken down shale plays before a price recovery emerged in 2018, spurring the return of production from the plays.