For reasons deep below the surface and right atop it, the North
American shale sector was due for a period of turbulence and
contraction. Then came two unforeseen accelerants: a global pandemic and
a costly price war—the combined forces of which sent oil prices down by
a record 65% during the first quarter of the year.
The double blow to the US shale sector has meant that in all
likelihood, hydraulic fracturing activity in North America has peaked.
Going forward, there will be fewer players and less production. Some
estimates project that by the end of the year, the hydraulic fracturing
market will be just 50% of what it was before the latest crash.
Just as likely though is that this disruptive corner of the oil and
gas industry will persist. Shale resources in the US remain vast. Even
more untapped resources are found elsewhere. But first, costs will have
to be cut and a lower-cost business structure will be needed to match
this second round of “lower for longer.”
https://pubs.spe.org/en/jpt/jpt-article-detail/?art=6921
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