U.S. shale drillers have managed to reduce production costs and boost productivity amid the oil price collapse, according to a new report from Wood Mackenzie. Via the Wall Street Journal, U.S. shale plays contain the bulk of the nine million barrels per day of oil that is viable at $60 per barrel. The report notes that shale drillers have become more adept at drilling in “sweet spots” to increase productivity and have received more favorable rates from suppliers, reducing production costs by 40%.
Wood Mackenzie said about four millions barrels per day of oil coming from conventional sources is not viable at $60 per barrel. Producers outside U.S. shale plays have only managed to reduce costs by 10-12%.
There have been signs in recent weeks that the oil market downturn has hit bottom at long last. A consortium led by Chevron and ExxonMobil recently approved a $37 billion investment in an oil field in Kazakhstan. Meanwhile, OPEC indicated in a new report the global oil glut could recede by next year.
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