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Nord Stream re-opening not enough to stop investment in non-Russia assets

Published by , Editorial Assistant
World Pipelines,


Following the news that Russia has re-opened its Nord Stream Pipeline, but only at 40%, Bhargavi Gandham, Oil & Gas Analyst at GlobalData, comments:

“Despite the Nord Stream Pipeline’s re-opening, the 40% capacity limitations are still not enough to support Europe’s needs, and oil and gas companies are still expected to increase their investments in non-Russian assets. This could drive investments in US shale, bringing attention to some of the US’s most promising assets such as the Permian Basin.

“Being the largest oil-producing basin in the US, the Permian Basin was the most affected play in the country during the COVID-19 pandemic. According to GlobalData’s latest report, ‘United States of America (USA) Permian Basin Oil and Gas Shale Market Analysis and Forecast, 2021-2026’, crude oil production fell from a 4.8 million bpd of oil average between January 2020 and March 2020, to a low point of 4 million bpd in May before settling to 4.3 million bpd for the rest of the year. The play was also shut down in February over fears of a winter storm, which also impacted production.

“However, with successful vaccination drives, and the easing of restrictions the Permian Basin has now surpassed pre-pandemic levels to reach around 5.1 million bpd in May 2022. Moving forward, both crude oil and natural gas from this play are anticipated to rise amid global energy demand rebound and high oil prices.

“Amid the ongoing Russia-Ukraine war, which has affected global oil supply, several operators, from Diamondback Energy to Pioneer Natural Resources Co., Chevron and Devon Energy Corp. are planning to ramp up their production in the Permian Basin and raise their investments to leverage the growing demand for oil. In 2022, fifteen major operators are already planning to spend around US$20.2 billion on the asset, an annual increase of 16% from 2021.”

Read the article online at: https://www.worldpipelines.com/special-reports/26072022/nord-stream-re-opening-not-enough-to-stop-investment-in-non-russia-assets/

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