Pioneer CEO Sheffield Warns U.S. Shale Is Unable to Grow Much More
(Bloomberg) — U.S. shale lacks the capacity to come to the rescue of consumers battling sky-high energy prices with much more crude production, says the boss of the Permian Basin’s biggest oil explorer.
Only OPEC countries like Saudi Arabia and the United Arab Emirates have the ability to meaningfully increase production fast in the wake of supply shortages, Pioneer Chief Executive Officer Scott Sheffield said on Bloomberg TV. U.S. shale, the world’s oil growth engine for the past decade, is constrained by labor shortages and demands by shareholders to return cash, he said.
“Several other producers are having trouble getting frack crews, they’re having trouble getting labor and they’re having trouble getting sand; that’s going to keep anybody from growing,” Sheffield said. “If the president wants us to grow, I just don’t think the industry can grow anyway.”
Surging oil prices that many on Wall Street now expect to reach $100 a barrel have been a major cause of concern for governments confronting voter discontent over a higher cost of living. Most notably, U.S. President Joe Biden, has criticized American drillers for not producing more and has released crude from strategic reserves in a bid to ease gasoline prices at the pump.
Also See: Permian Roughneck Shortage Clouds Outlook for Oil Output Growth
Crude prices have surged 40% since early December to more than $90 a barrel as rising global demand and geopolitical concerns increase due to tensions between Russia and Ukraine. But don’t expect U.S. shale to increase production to ease shortages, Sheffield said.
“If Russian oil is sanctioned, or if Russia decides to stop exporting, then it’s going to be up to the Saudis and UAE to decide whether to break the pact and increase production,” he said.
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