The Permian Basin is the largest oil-producing shale play in the US. Credit: FreezeFrames via Shutterstock.

The Permian Basin remains the largest oil-producing shale play in the US, with global demand and geopolitical shifts continuing to support growth and competitiveness in the region, according to research from Offshore Technology’s parent company, GlobalData.

The region’s crude oil production averaged 5.6 million barrels per day (mmb/d) during the first quarter (Q1) of 2024, accruing benefits from a dense pipeline network and Gulf Coast infrastructure, revealed the report, titled ‘Permian Basin in the US, 2024‘.

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Ravindra Puranik, oil and gas analyst at GlobalData, said: “Europe’s strategic shift away from Russian energy exports has resulted in key changes to the global energy supplies. This is anticipated to benefit the US shale oil and gas drillers, as well as LNG [liquified natural gas] producers who are positioned to reap from these evolving supply chain dynamics.

“The US shale oil production might also benefit from the Red Sea crisis that has added a risk premium to ship-based exports from the Middle East to Europe.”

Throughout 2023, there was significant consolidation in the US oil and gas industry, with exploration companies spending as much as $234bn on mergers and acquisitions (M&A), the highest level in real dollar terms since 2012.

According to the US Energy Information Administration’s (EIA) latest analysis, this uptick in deal-making marks a return to a trend of consolidation among oil companies in the US after transactions declined amid oil market volatility in 2020 and 2022.

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Referring to the M&A activity, Puranik added: “ExxonMobil’s acquisition of Pioneer Natural Resources was the biggest deal in the Permian Basin shale play in recent years. The deal worth $64.5bn has put ExxonMobil on the top of the pedestal, surpassing competitors in this play such as Occidental and Chevron.

They added that continued “investment and strategic acquisitions in the Permian Basin will be essential to maintaining its leadership in the US shale industry, especially as global energy dynamics shift and demand for reliable oil and gas supplies remains strong.”