- The Permian Basin will have to shut wells within four months because of a lack of pipelines to get the oil to customers, Pioneer Natural Resources (PXD +0.6%) Chairman Scott Sheffield tells Bloomberg in an interview at the OPEC meeting in Vienna.
- "Some companies will have to shut in production, some companies will move rigs away, and some companies will be able to continue growing because they have firm transportation," Sheffield says.
- The Permian is growing at 800K bbl/day annually and production currently stands at 3.3M bbl/day; with total pipeline capacity at 3.6 M barrels, the region would reach capacity in the next 3-4 months, Sheffield says, adding that the bottleneck likely will not ease for at least a year.
- The worsening bottleneck provides an unexpected boon to OPEC and other oil producers outside the U.S., which have seen surging production from U.S. shale producers grab market share.
- Among many relevant tickers: EOG, LPI, FANG, SN, COG, CRZO, CXO, RSPP, DVN, NFX, OXY, CVX, XOM, NBL, PAA, MMP, TRGP, KMI, APC, APA, WPX, CDEV, REN, EGN, JAG, AXAS, HK, MCF, XEC, PE, SM, MTDR, QEP, AR
- Now read: Kinder Morgan - Selling The Trans Mountain Pipeline Isn't A Huge Deal
Original article