Permian Basin oil production to reach 5.4 mbd in 2023: IHS Markit

FILE PHOTO: An oil pump is seen operating in the Permian Basin near Midland, Texas, U.S. on May 3, 2017. REUTERS/Ernest Scheyder/File Photo

(Reuters) - Oil production in the U.S. Permian Basin is expected to total 5.4 million barrels per day (mbd) in 2023, driven by nearly 41,000 new wells and $308 billion in upstream spending between 2018 and 2023, analytics and data provider IHS Markit said on Wednesday.

The forecast is based on an assumption of an oil price environment of around $60 per barrel or higher, the company said in a release.

The Permian Basin, located in Texas and New Mexico, is the United States’ biggest oil patch.

“In the past 24 months, production from just this one region - the Permian - has grown far more than any other entire country in world,” Daniel Yergin, vice chairman of IHS Markit said in the release.

“Add an additional 3 mbd by 2023 - more than the total present-day production of Kuwait - and you have a level of production that exceeds the current production of every OPEC nation except for Saudi Arabia.”

The output from the Permian was projected to climb 78,000 bpd to a fresh record of 3.28 million bpd in June, the Energy Information Administration said in its monthly drilling productivity report last month.

Production of both natural gas and natural gas liquids (NGLs) in the Permian are expected to double during this period, reaching 15 billion cubic feet per day and 1.7 mbd, respectively, IHS Markit said.

Reporting by Eileen Soreng in Bengaluru; editing by Jonathan Oatis