Texas Oil Producers Look Beyond the Permian as Growth Slows
After more than a decade of dominance driven by the shale revolution, Texas oil producers are increasingly exploring international opportunities amid concerns that domestic production is plateauing, particularly in the Permian Basin.
Once the centerpiece of global shale growth, U.S. oil fields may no longer offer the same scale of expansion opportunities that fueled the industry since 2009.
Why Companies Are Looking Abroad
1. Resource Maturity in U.S. Shale Plays
- Concerns are growing about the long-term availability of high-quality drilling locations in the Permian Basin and Eagle Ford.
- Industry analysts suggest domestic production growth may be flattening.
- Smaller and mid-sized producers could face more limited opportunities going forward.
Harold Hamm of Continental Resources recently warned that U.S. production is plateauing.
2. Continental Resources Shifts Focus
- Continental announced it would stop drilling in North Dakota’s Bakken for the first time in decades.
- The company is doubling down on Argentina’s Vaca Muerta shale play.
- It is also developing Turkey’s Diyarbakir Basin, estimated to hold more than 6 billion barrels.
This marks a strategic shift for a company historically rooted in U.S. shale.
3. EOG Expands Internationally
- EOG Resources has pursued exploration in:
- Trinidad and Tobago
- The Middle East
- United Arab Emirates
- Bahrain
These agreements could be worth billions and reflect a broader pivot toward international diversification.
Industry-Wide Forces Driving the Shift
Global Supply Changes
- Russia’s invasion of Ukraine in 2022 disrupted global oil flows.
- European markets turned to alternative suppliers, increasing interest in Africa and South America.
- Oil majors like Chevron, ExxonMobil, and BP expanded foreign operations.
Consolidation in the U.S.
A major wave of mergers and acquisitions has reshaped the domestic landscape:
- Exxon acquired Pioneer Natural Resources.
- Diamondback expanded aggressively.
- Coterra and Devon announced a $21.4 billion merger.
Result:
- Fewer independent operators.
- Larger companies controlling premium acreage.
- Reduced growth runway for smaller players.
Economic Pressures
Companies also face:
- Lower crude prices
- Rising production costs
- Tariff complications
- Capital discipline pressures from investors
Analysts say maintaining growth will require new resource bases outside the Permian.
International Opportunities Gaining Momentum
Argentina’s Vaca Muerta
- Fourth-largest known oil reserves globally.
- Expected to add 700,000+ barrels per day by 2030.
- Projected to outpace U.S. production growth over the same period.
Turkey’s Diyarbakir Basin
- Estimated reserves exceeding 6 billion barrels.
- Partnership between Continental and Turkey’s national oil company.
Venezuela (Uncertain but High-Risk Opportunity)
- Potential reopening under Trump administration policies.
- Houston-based Hilcorp Energy signaled readiness to invest.
- Analysts remain skeptical about long-term political stability and sanctions durability.
What This Means for Texas Oil Companies
Strategic Implications
- U.S. shale expertise is being exported abroad.
- International expansion may become essential for sustained production growth.
- Companies are hedging against domestic resource limits.
Risk Considerations
- Political instability in foreign markets
- Regulatory uncertainty
- Higher operational complexity abroad
- Capital allocation discipline pressures
Long-Term Question
Can the Permian remain the growth engine it once was, or is the shale boom entering a more mature phase?
Bottom Line
Texas oil producers are no longer relying solely on the Permian Basin for future growth. As domestic production levels off and consolidation intensifies competition, companies are increasingly looking to Argentina, Turkey, Africa, and potentially Venezuela to maintain output and investor returns.
The shale revolution may have started in Texas, but its next chapter could unfold overseas.
Source: Rachel Nostrant, Houston Chronicle, “The Permian Basin used to be enough for Texas oil companies. Now they’re looking elsewhere.”
Author: Rachel Nostrant | Houston Chronicle
Orignal Story: https://www.houstonchronicle.com/business/energy/article/texas-shale-exploration-permian-continental-eog-21320530.php