NEW ORLEANS, March 24 (UPI) -- "Financial prudence" will be the new normal for developments in shale basins in the United States in the era of low oil prices, the head of Schlumberger, the world's largest oilfield services company, said.
The low price of oil is forcing energy companies to spend less on exploration and production. The North Dakota government reported the number of rigs actively exploring for or producing oil in shale-rich state was 100, about half as many as reported in the state last year.
Schlumberger Chief Executive Officer Paal Kibsgaard said in an energy conference in New Orleans the current market should persist in the coming years.
"Going forward, we believe financial prudence, where investments are limited to the cash flow generated by production, will be the new normal for U.S. tight-oil developments," he said Monday. "This further means that drilling activity will be focused on the acreage that is still viable at lower oil prices and that a further reduction in cost-per-barrel will be critical going forward."
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The U.S. Energy Information Administration finds net production from key shale basins in the United States may slow down in April. Of the seven shale basins reviewed, only the Permian shale in western Texas shows a projected gain.
Those seven shale basins, located largely in the central United States, accounted for more than 90 percent of oil production growth from 2011-13, EIA said.
Kibsgaard said the "biggest opportunity" moving forward in U.S. shale "will be to significantly improve production per well."
The CEO in January said that, although there were signs that global oil demand would increase, forecasts for growth in global gross domestic product has "softened," leading to uncertainty in 2015. This, in turn, means exploration and production, the sector on which Schlumberger thrives, is expected to be "sharply lower," he said.
