It’s Houston vs. Houston, as offshore drillers compete with onshore shale oil
https://www.houstonchronicle.com/business/columnists/tomlinson/article/It-s-Houston-vs-Houston-as-offshore-drillers-12879062.phpMay 2, 2018
Competition for oil companies does not solely come from overseas anymore; the fiercest opponents are across the street, or maybe even in the same building.
Executives and engineers responsible for offshore drilling are struggling to compete with their compatriots in the onshore shale oil fields. With the U.S. pumping more than 10 million barrels a day, the competition is Houston vs. Houston to see who can build the simplest, most productive wells.
At the biggest oil companies, offshore engineers on one floor are competing against shale brethren on another for the limited dollars available for drilling. The team that produces the most barrels at the lowest breakeven price wins...
...When prices dropped below $30 a barrel in 2016, onshore and offshore took separate paths. Shale engineers kept drilling and drove down costs by turning their fields into factories. The offshore sector almost stopped drilling and demanded that services companies lower prices rather than help the sector become more efficient.
From 2007 to 2013, oil companies approved 40 deep-water wells a year on average, according to industry analysis firm Wood Mackenzie. In 2015, that number dropped to 10 and only began to recover last year to 32. The industry is expected to approve 30 projects this year, said Julie Wilson, a Wood Mackenzie research director.
The new projects, though, are much smaller than in the past, the majority costing less than $6 billion and accessing reservoirs of less than 1 billion barrels of oil equivalent....
