- 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.