World is Entering a Period of Oil Scarcity, Halliburton Says

Liz Hampton
Tuesday, December 7, 2021

Oilfield services firm Halliburton on Monday warned the world is headed for a period of energy scarcity following years of underinvestment in bringing more fossil fuels to market.

"For the first time in a long time, we will see a buyer looking for a barrel of oil, as opposed to a barrel of oil looking for a buyer," Halliburton Chief Executive Jeff Miller said at an oil and gas conference in Houston.

It could take about a decade to ease the supply crunch, Miller told Reuters on the sidelines of the conference.

U.S. oil prices in October jumped to a seven-year high of $85 a barrel as the economy recovered from the coronavirus pandemic and demand surged. Critics have pointed fast-shift to renewable energy and pressure from governments to reduce fossil fuel production for the rising prices.

Miller, however, did not blame the energy transition and said it in fact needed to move faster to help alleviate high prices.

"The fact is that there is not enough energy. If there were abundant alternative energy sources, we wouldn't see commodity prices spiking," he said.

In the United States, many companies are holding production flat or limiting growth next year, following a push from investors to focus on increasing returns over output. U.S. oil production could reach 11.9 million barrels per day in 2022, an increase of 800,000 bpd from 2021, according to a U.S. Energy Information Administration forecast.

Miller expects his oil producing customers next year will increase spending on new oil and gas by 20% or more and warned that the services market would be strained by tight supplies of equipment.

While Halliburton continues to invest in new technologies, such as electric hydraulic fracturing fleets, he said the pace of investment would be muted, especially as margins have been squeezed for oilfield service companies.

"Our rate of reinvestment is substantially lower. We don't believe this cycle will get the kind of legs it has had in the past," he said. 

(Reporting by Liz Hampton in Houston Editing by Marguerita Choy)

Categories: Energy Industry News Activity Production North America Oilfield Services

Related Stories

Seatrium Secures ABS Backing for Deepwater FPSO Design

Hibiscus Petroleum Starts Drilling at Teal West Field off UK

Yinson Production Nets DNV Approval for New FPSO Hull Design

Hanwha Ocean's Tidal Action Drillship Starts Maiden Job with Petrobras

Petronas to Leverage AI to Expedite Oil and Gas Exploration Activities

Brownfield Output Decline Accelerates, says IEA

Aquaterra Energy Nets Subsea Analysis Contracts with INPEX off Indonesia

Saipem Wins FEED Contract For Abadi LNG Project FPSO Module In Indonesia

China Starts Production at Major Oil Field in Bohai Sea

CNOOC Starts Production at Offshore Field in South China Sea

Current News

Ventura Offshore’s Semi-Sub Rig to Keep Drilling for Eni in Asia

SBM Offshore, SLB to Optimize FPSO Performance Using AI

MODEC Ramps Up Hammerhead FPSO Work After ExxonMobil's Go-Ahead

Aesen, DOC JV Targets Subsea Cable Logistics

Timor Gap Boosts Stake in Finder Energy’s Timor-Leste Oil Fields

SBM Offshore Starts Construction of FSO for Trion Oil Field off Mexico

Russia Targets 2028 for Sakhalin-3 Gas Project Start Up

Seatrium Secures ABS Backing for Deepwater FPSO Design

MDL Secures Cable Laying Job in Asia Pacific

Hibiscus Petroleum Starts Drilling at Teal West Field off UK

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com