(CU)_An unprecedented cold blast has frozen well operations across the central US, which saw the country’s oil production plunge by nearly 40 per cent, sources with direct knowledge of the operations say. These sources, who have requested to remain anonymous, say that the crude output has now fallen by more than 4 million barrels a day nationwide, in comparison to about 11 million barrels a day prior to the cold snap.
Meanwhile, experts say that not only are the losses larger than expected, they will also be longer lasting than anticipated. America’s largest oil field, the Permian basin, is the worst affected region, with its output slumped between 60 to 85 per cent.
Experts at Energy Aspects Ltd, an independent energy commodity research consultancy, have warned that the losses which are “much higher than initial estimates” may not return to previous levels until the beginning of next week.
“As producers need pipes to be fully running and power prices to normalize before they return production, a substantial return in production may not occur until this weekend at the earliest,” Amrita Sen, the firm’s chief oil analyst said.
Unlike in more northerly oil regions where well heads and pipelines are laid under the surface, in Texas however, they are laid on the ground, and therefore, operations have stumbled on account of the temperatures which are low enough to freeze oil and gas liquids.
This unprecedented disruption has led oil prices to rise to their highest so far this year. Meanwhile, some of the companies hit by the cold wave have shut in compression and production at wells, and have issued a force majeure notice to suppliers.
