Energy executive predicts U.S. will export crude oil

Posted Thursday, Apr. 04, 2013  comments  Print Reprints
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Scott Sheffield has a quick word of advice to observers of the continuing oil boom in West Texas' venerable Permian Basin: Get used to the idea of exporting U.S. crude oil.

"We'll be exporting crude at some time. We'll have to," Sheffield, CEO of Irving-based Pioneer Natural Resources, told an audience at Hart Energy's DUG Permian Basin conference at the Fort Worth Convention Center. The annual meeting traditionally spotlighted the hometown Barnett Shale and other natural gas plays in the country. But with growing attention paid to the state's crude oil production, this year's gathering focused on West Texas.

One speaker joked that the conference would have been held in Midland, but there weren't enough available hotel rooms for the event there.

Production in the basin accounted for 57 percent of Texas' crude oil output last year and 14 percent of all U.S. oil production, according to the Texas Railroad Commission. The field produced 312 million barrels of crude oil in 2012, up 20 percent since 2009, Railroad Commission records show, and drilling permits issued in the field have nearly tripled in the same time.

By the Railroad Commission's count, the Permian Basin encompasses more than 7,000 separate fields. But the one Sheffield wanted to talk about, and which the commission says is part of the Permian, is the Spraberry-Wolfcamp shale play.

Based on total recoverable reserves -- a term that does not take into account the cost of developing and producing them -- the Spraberry-Wolfcamp is among the world's largest oil fields, Sheffield said.

According to the Railroad Commission, that field surpassed 80 million barrels of oil produced last year, or about 220,000 barrels a day.

Sheffield said the boom has pushed Pioneer's employment in the Permian to about 1,200, and noted that Chevron is building a new office campus in Midland, which it says will cost $100 million and house about 800 workers.

Other speakers also addressed the Permian's growing production. An executive for Kinder Morgan, the nation's biggest pipeline operator, said the company expects to convert a pipeline to California from natural gas to crude oil by the end of 2016, while Magellan Midstream Partners expects to open its Longhorn Pipeline to East Texas by the end of 2014 or early 2015.

Finding financing for all this activity has not been difficult, Sheffield said.

"I've never seen this much capital going into the oil and gas industry," he said.

Jim Fuquay, 817-390-7552

Twitter: @jimfuquay

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