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U.S. energy agencies added oil and natural gas rigs for the ninth week in a row this week, data shows Friday, as most small producers responded to higher prices and persuaded the government to increase output.
The oil and gas rig count, a preliminary index of future output, rose 14 to 728 per week from May 20, the highest since March 2020, energy services firm Baker Hughes Co. said in its closely followed report.
Baker Hughes said the total rig count increased 273 or 60% compared to the same period last year.
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U.S. oil rigs rose 13 to 576 this week, their highest since March 2020, while gas rigs rose one to 150, their highest since September 2019.
More than half of U.S. oil rigs have Permian shells in West Texas and eastern New Mexico, where total units rose 8 to 343 this week, the highest since April 2020.
Since Moscow invaded Ukraine on February 24, the U.S. government has called for more oil and gas production to reduce the domestic price of drillers and help allies break their dependence on Russian power. Benchmark US crude prices have risen about 49% so far this year.
The rag count record has been rising for 21 months but increasingly, as publicly traded producers cling to their capital discipline, the country’s overall production is about one million barrels per day (bpd) lower than the country’s 2019 record.
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Several producers who have started drilling in recent months are small, private companies that usually respond quickly to unchanged price changes.
Meanwhile, many publicly traded companies have gradually increased their spending on new drills as they continue to repay cash and pay off debts to shareholders.
“Private operators will be a significant driver, as they have responded quickly to emerging markets, increased activity and output,” analysts at energy research firm Rystad Energy said this week.
In a short span of one year between January 2021 and April 2022, private companies have more than doubled their combined rig count in the Permian Basin from 30 to 73, Ristad said.
Permian oil production rose 88,000 bpd in June to a record 5.219 million bpd, according to official data.
Rystad estimates that investment in Permian will grow by more than 40% from 2021 to $ 25.7 billion this year.
The increased Permian spending will come largely from oil giants Exxon Mobil Corporation, Chevron Corporation, BP and ConocoPhillips, which rose 60% to 20 7.4 billion in 2022 compared to the 2021 level, and private, up 50% from the 2021 level to about $ 20 billion. , Ristad said. (Reporting by Scott Disavino, edited by Margarita Choi)