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 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 said.
The Permian is growing at 800,000 bbl/day annually and production currently stands at 3.3 million bbl/day; with total pipeline capacity at 3,600 barrels, the region would reach capacity in the next three to four 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.