Oil and Gas Sector, 2007
U.S. Market Overview
According to the U.S. Energy Information Administration (EIA), the U.S. holds 21.76 million barrels of proven oil reserves, and 204 trillion cubic feet (tcf) of natural gas. U.S. crude oil production, which declined following the oil price collapse of late 1985/early 1986, leveled off in the mid-1990s, and began falling again following the sharp decline in oil prices of late 1997/early 1998. During 2005, the United States produced around 7.5 million barrels of oil per day (or bpd, of which 5.4 million bpd was crude oil) a 50-year low. Top producing areas are the Gulf of Mexico, Texas, Alaska's North Slope, California, Louisiana, Oklahoma, and Wyoming.
Net imports of oil totaled 12.2 million bpd, or 59 percent of total consumption. The top suppliers of imported oil to the U.S. were Canada, Mexico, Saudi Arabia, Venezuela, and Nigeria. The EIA expects that oil consumption will grow from about 20 million bpd in 2005 to 26.9 million bpd in 2030, and imports will meet 61 percent of this demand.
There are 132 refineries in the U.S., with a capacity of 16.8 million bpd. Most refineries are operating at or near capacity, and it is likely that many refineries will expand in the next few years, but new refinery construction is not expected.
In 2005, the U.S. produced 24.4 tcf of natural gas. Domestic gas production has been flat for many years, and the EIA expects that it will remain so, while rising consumption will cause net imports to grow from 3.57 tcf in 2005 to 5.45 tcf by 2030. This increase in demand has spurred plans for many new terminals for imports of liquefied natural gas. The EIA expects that by 2030, net LNG imports will grow from 1.4 tcf in 2005 to 4.5 tcf in 2030. There are currently plans for more than 30 new terminals in North America; however it is unlikely that more than 8-10 of them will be built.
It is possible that in the coming years, Congress will decide to open more oil and gas provinces to development, including more fields on Alaska’s North Slope, additional areas in the Gulf of Mexico, and more areas off the Atlantic and Pacific coasts.
Many majors and independents active in the United States are foreign-owned or affiliated. Two of the largest U.S. oil and gas producers are British-owned BP, and Anglo-Dutch Shell. In 2003, production by companies with foreign direct investment made up about 12 percent of the oil and 10 percent of the gas produced in the U.S. There are no official restrictions on participation by foreign companies in oil and gas production, refining, or distribution. Exports of crude oil are permitted, consistent with the Department of Commerce's specific export control requirements. Companies wishing to export natural gas must apply for a permit from the Department of Energy.