In 6 years America will become the world’s largest oil producer once again

“America is poised to become the world’s largest oil producer once again — nearly four decades after it lost the title,” writes The Sunday Times.

Goldman Sachs, the investment bank, has predicted that US production will hit 10.9m barrels a day by 2017, a one-third rise over its current level of 8.3m barrels a day.

The surge is a result of novel drilling technologies that have opened new fields. The last time America was the biggest crude producer was 1973, when Opec, the cartel of oil-producing nations, launched its first embargo and sent prices soaring. Russia was the world’s top producer last year with daily output of 10.6m barrels, followed by Saudi Arabia at 10.4m. There are doubts about the ability of both to increase production substantially. Goldman expects Russia, whose nationalistic approach to natural resources limits investment from western firms, to have raised output by only 100,000 barrels a day by 2017.

... “The world cannot be running out of oil, because Aidan Heavey keeps finding more of it. Tullow Oil’s chief executive has seen the fortunes of his company transformed twice with big discoveries in Uganda (2006) and of Ghana (2007), and investors had been hoping for a third act. The 15% pop in Tullow’s share price on Friday after news of a potentially significant find off French Guiana sounds like that act’s opening lines. The Zaedyus well is real frontier territory and looks to be a mirror image of Tullow’s Jubilee fields in Ghana. Northern South America and west Africa were physically joined aeons ago; Tullow’s exploration follows the view that they should be geologically similar. (…) But much more drilling must be done to establish whether Zaedyus and its surrounding fields will yield as much as Jubilee. (…) And takeover-talk routinely surrounds Tullow; the more oil it discovers, the more attractive it becomes to resource-hungry national oil companies. But at these valuations, they may have already missed their chance,” writes the Financial Times in this weekend’s edition.