WASHINGTON: The United States’ crude oil production (including lease condensate) increased in 2014 by 1.2 million barrels per day to 8.7 million bpd, the largest volume increase since record-keeping began in 1900.
This may lead to further reduction in the already little quantity of crude oil the US currently imports from Nigeria. The discovery of Shale gas by the US had caused major reduction in the US’s oil imports from Nigeria.
According to data from the US Energy Information Administration, on a percentage basis, output in 2014 increased by 16.2 per cent, the highest growth rate since 1940.
“Most of the increase during 2014 came from tight oil plays in North Dakota, Texas, and New Mexico where hydraulic fracturing and horizontal drilling were used to produce oil from shale formations,” the EIA said.
“In percentage terms, the 2014 increase is the largest in more than six decades. Annual increases in crude oil production regularly surpassed 15 per cent in the first half of the 20th century, but those changes were relatively less in absolute terms because production levels were much lower than they are now.”
The EIA said the crude oil production in the US had increased in each of the previous six years, adding that this trend followed a period from 1985 to 2008 in which crude oil production fell in every year (except one).
With the surge in domestic production, US imports of oil and petroleum products from the Organisation of Petroleum Exporting Countries have plunged to a 28-year low, leaving Nigeria as one of the biggest victims.
The US imported a mere 19,000 barrels per day from Nigeria in January this year, compared to 54,000bpd from Angola, Africa’s second largest oil producer after Nigeria.
The US imports of Nigerian crude oil tumbled by 75 per cent last year to 21.51 million barrels, the lowest since the country started importing from Nigeria, the EIA said.
The country, which traditionally had been the largest importer of Nigerian oil until the last few years, changed to the 10th largest in 2014.
In July last year, the US imports of Nigerian crude fell to zero for the first time on record, according to data from the EIA.
Not only has the US drastically reduced its import of Nigerian crude as a result of its increasing shale oil production, the country is gearing up to export its crude oil, with Asia being a key target destination.
After months of pressure over the ban on exports of most domestic crude in the US, the President Barack Obama administration in January took steps that were expected to unleash a wave of ultra-light shale oil known as condensate onto global markets.
According to the EIA, although oil production in the US is expected to rise in 2015 and again in 2016, the growth is not expected to be as strong as in 2014.
It said since mid-2014, the price of crude oil had fallen about 50 per cent, which had slowed production in marginal drilling areas and focused investment in the more developed areas of tight oil plays.
“Annual crude oil production is expected to grow at a slower rate, 8.1 per cent this year and 1.5 per cent next year, according to EIA’s latest Short-Term Energy Outlook. The slowdown in growth is more evident when looking at production between December 2014 and December 2015, which is forecast to rise by just 200,000 bpd,” the EIA said.
