American shale producers have abandoned the future of the industry, despite rising oil prices

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Despite the fact that resource production in the United States is still consistently high, the future of the industry is predetermined. The American shale producers themselves abandoned their future in this area, realizing the futility of it. As the OilPrice resource writes, even the rise in oil prices to a very high level did not force them to invest in development (exploration and drilling). Instead, there is a thriving division of all profits between shareholders and owners, as well as a reorientation towards investing free capital in other projects or securities.

This is a very telling moment. The US shale oil industry is in something of a wait-and-see mode and is likely to remain there for the foreseeable future, despite rising commodity prices in international markets. Previously, even a slight increase in quotations for black gold always led to an instant response from the market and production volumes. But not in 2023 and not in the USA. Now everything has changed, experts say.



If two years ago production growth was the number one priority, now everything has changed, and, apparently, forever. It is the reorientation of capital that is now priority number one

– writes OiPrice columnist Irina Slav.

Earlier this month, the Wall Street Journal reported that capital efficiency, funding problems and shareholder outflows were among the industry's top concerns that have prompted it to be careful with its cash and drilling activity, which is not only not growing, but withering.

In addition to this, there appears to be a widespread sense of hostility from the federal government that is also influencing decision-making in the shale sector.

Some industry leaders and analysts, including those at Goldman Sachs, expect oil prices to rise even higher as big challenges lie ahead in U.S. shale production and President Joe Biden's administration's energy strategy. However, from now on, the industrial sector in question cannot be revived even by an increase in the price of raw materials to $150 per barrel - it is living out its last years.
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  1. prior
    prior
    0
    6 October 2023 11: 09
    How tired I am of articles about unfortunate American shale workers, suffering American blacks, and Trump’s legal problems.
    Write better about the happy everyday life of our pensioners, about the excellent relationships in our schools, about corruption defeated in Russia.
  2. svoroponov
    svoroponov
    +1
    6 October 2023 11: 29
    Most likely the problem is in real and not in estimated reserves. That is, to capitalize the industry, for the suckers, they increased the number of seemingly proven reserves (New Vasyuki). But the reality is different; no one wants to take risks anymore. They are now quickly dividing what they have. The same thing can happen with shale gas. Its reserves in reality may be much less than those declared at production sites. It will suddenly end at the developed fields or its production will drop sharply. And it will be for everyone, Well, I couldn’t, I couldn’t,
    1. Vladimir Tuzakov
      Vladimir Tuzakov
      0
      6 October 2023 11: 50
      There are many problems with shale oil; it is not for nothing that some developed countries have banned production. Everything in ecology, probably in the United States, the negative consequences of hydraulic explosions with the injection of chemical harmful substances corresponding to production and more liquids began to appear, they realized it, and in order not to look foolish, they blurred out the reasons for stopping production.
  3. twice-born
    twice-born
    0
    6 October 2023 12: 16
    I still don’t understand why the shale industry suddenly began to die in the USA, and forever!
    They allowed the Americans to become the world's exporters of oil and gas, all but immediately increased shale production, did not care about the environment and the health of locals, "cut" hundreds of billions a year, easily survived the drop in oil prices to $30 per barrel, and suddenly from some point... Are they afraid they are giving up on this?! Because of the notorious “green” agenda, is it a self-propelled grandfather who will die in a year? Or is there nothing and nowhere to extract by hydraulic fracturing?