The earthquake adds a new hurdle to slowing gains in oil production in Texas

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(Reuters) – The latest earthquake in West Texas will add costs to producers already suffering from inflation and supply shortages, as operators scale back their use of sewage wells in the largest US shale field.

Wastewater from oil and gas production is often pumped underground and is blamed for rising earthquakes in the oil fields of Oklahoma and Texas. Regulators in both countries limit the amount of water that can be injected, particularly into deep wells.

Last week, Texas expanded injection area limits that will reduce volumes to 162,000 barrels per day by mid-2023, 68% less water than early 2022 levels. If another earthquake of magnitude 4.5 or higher occurs in that area, all wells will be shut down. within the limits for a period of 24 months from the date of the event.

The new injection limits include 10 wastewater deep wells operated by Chevron Corp (CVX.N), which are permitted to process about 745,000 barrels of water per day, and nine deep wells operated by Coterra Energy (CTRA.N), which can process 615,000 barrels. barrels of water daily.

“Since early 2022, Coterra has reduced deep disposal volumes in the Delaware Basin by more than 50% and expects to have little or no deep disposal in the Delaware Basin by mid-2023, so we see no impact on production,” the spokesperson said.

Shervon did not immediately respond to a request for comment.

In mid-November, a 5.4-magnitude earthquake struck an area where operators were already being asked to reduce dump volumes.

There are now 78 active earthquake disposal wells in the North Culberson-Reeves Seismic Response Area. The revised plan affects 19 new deep wells that were collectively processing about 400,000 barrels of water per day, according to researcher B3 Insight data.

There is a “very real possibility” of another major earthquake, said Laura Capper, CEO of CAP Resources, a water management and risk mitigation consulting firm.

She said, “The absolute closure of the deep wells in the region will lead to a major logistical problem to maintain oil and gas production in the highly productive fields in New Mexico and West Texas.”

Shale executives warned this year that production growth may continue to slow. Production in the Permian is expected to rise by 37,300 bpd next month to 5.58 million bpd, slower than the gains seen in recent months.

(Reporting by Liz Hampton in Denver). Editing by Stephen Coates

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