Big oil companies like BP, Royal Dutch Shell and ExxonMobil have spent $20 billion buying out hydraulic fracturing companies, potentially setting the stage for another American oil and natural gas boom built on the infrastructure of the first boom, The Wall Street Journal reported.
Oil companies are investing $20 billion in fracking operations on the hopes the price of oil will start to rise again. They are betting on fracking making more in the long run than traditional oil production.
Offshore oil drilling platforms and import facilities are too costly an investment when oil is $45 a barrel. Major players like Exxon have actually lost money in the U.S. drilling business for six straight quarters because it hasn’t mastered fracking technology.
In 2014 and 2015, fracking wells drilled by BP,Shell PLC, Exxon and Chevron were on average one-third less productive than wells drilled by fracking companies, according to another recent Journal report. The sheer amount of money the big oil companies have could potentially set the stage for another American oil and natural gas boom built on the infrastructure of the first boom.Fracking accounted for 51 percent of American oil production last year,
Fracking accounted for 51 percent of American oil production last year, according to a March report by the Energy Information Administration (EIA). The EIA reported that in 2000, about 23,000 fracking wells provided 2 percent of the nation’s oil — about 102,000 barrels per day. In 2015, the number of fracking wells had grown to around 300,000, producing 4.3 million barrels of oil per day.
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