Skip to main content

Editorial comment

Russia’s invasion of Ukraine has shattered many cast-iron assumptions: overturning decades of pacifism and underspending on defence, Germany now helps arm Ukraine’s military; Switzerland, neutral for centuries, has joined the European Union, the UK and the US in sanctioning Russia; and the US, looking for replacements to embargoed Russian oil and gas and an end to rocketing oil prices, is entreating long-time enemies Iran and Venezuela – which has blamed the US and NATO for the conflict in Ukraine – to increase production.

Register for free »
Get started now for absolutely FREE, no credit card required.

Amidst all of this, the US shale industry finds itself at a difficult juncture. On the one hand, President Joe Biden has urged US oil producers to also increase output to help make up for the millions of barrels of Russian oil that will be off the market. This has raised eyebrows – many in the industry see the Biden administration as hostile towards it, citing the cancellation of the Keystone XL pipeline last year. However, the anticipated shortfall in global oil production, as a result of the embargoes on Russia, is such that if US oil companies want any hope of supply tightness easing then they will have to comply with Biden’s appeal, and hope that Venezuela, Saudi Arabia and Iran follow suit, however unpalatable that may be.

On the other hand, as outlined by Wood Mackenzie in these pages, the US shale industry is not ready for a rapid scale-up of production. Spooked by the boom-and-bust years, companies are now far more averse to expanding operations. Instead, reducing debt and delivering consistent shareholder dividends are key priorities. On top of this culture shift, supply chain issues also make a rapid, significant production increase in the shale plays tricky. As Occidental Petroleum chief executive Vicki Hollub said in an interview with The Economist earlier this month, supplies of tubulars, frac sand and lorry drivers are low. Hollub said: “...our industry today cannot replace those [Russian] barrels anytime in the near-term... we’re 10 to 12 months out from being able to significantly increase over what we already had planned to do.”1 Complicating an already fraught picture is the considerable uncertainty over the ability and willingness of OPEC to make up for the global shortfall; high oil prices look likely for the foreseeable future.

Despite the sense of pervading gloom, in the words of Brandon S. Mitchell from TETRA Technologies ‘amid today’s disruption and chaos, it is reassuring to pause for a moment to consider how much has been achieved in just the past 5 years’ by the upstream industry. Turn to pg. 14 for a piece by Brandon highlighting the recent advances in sand removal technologies. Elsewhere in the issue readers can enjoy articles on dissolvable frac plug technology, digitalisation of offshore operations, annular intervention, oilfield chemicals, subsea compression systems and smart instrument measurement.

It is also heartening to see the return of face-to-face events. My colleague Ben Macleod will be attending OTC 2022 in Houston in May – if you’re attending, be sure to say hello and find out how Oilfield Technology can help with your marketing plans this year.

TRICKS, H., ‘Money Talks: Houston, we have a problem’, 9 March 2022. Available at: