Like other producers last week who pointed to flat growth (seerelated story) despite ramped up exploration and productionprograms, Anadarko Energy Services president Richard Sharplespredicted U.S. domestic gas production may rise only slightly thisyear.

Sharples, who addressed a record crowd at the Cambridge EnergyResearch Associates’ CERAWeek 2001 in Houston last week, called fordomestic energy producers to continue their quest for new gasreserves to offset the sharp declines in production from matureproducing basins.

Just maintaining the “current high level of activity,” Sharplessaid the mature basins would grow 1 Bcf/d, but producers have tofind 8.5 Bcf/d “just to stay even.” However, he held out only asmall hope that mature basins could grow that high. Anadarko now isrunning about 350 rigs for natural gas, mostly in the Bossier play,and it expects to see a “slight increase,” he said. Other basinswon’t do that well.

The outer continental shelf of the Gulf of Mexico has seen asharp decline in its production, and he called the Midcontinent “somature” that it wouldn’t matter how much drilling was done. Evenramped up deepwater drilling in the Gulf will not make up for theoverall decrease, he said.

In the 70’s and 80’s, Sharples said the North American surplusgas supplies were depleted, and U.S. markets depleted Canada’ssurplus supplies more quickly. Today, several things are slowingdomestic gas production, including an aged rig fleet, too-fewworkers and marginal drilling sites.

Rig efficiency has gone down because the producers are workingto obtain the last bit of gas from their mature basins, whichforces drills to go deeper and in tighter formations. Because fewerrigs are now being constructed, Sharples noted that inventory isnow pushed “beyond its capabilities.”

Another problem is a severe personnel shortage, especially onthe professional level, which he said was a critical issue. Theboom-and-bust cycles, coupled with the Internet age, have sentprospective graduates to other types of employment.

Also on his list of problems in the industry were the federalrestrictions, which have depleted prospective drilling sites bothonshore and offshore. Most criticized was the lockup of land in theRocky Mountains, which he said has kept nearly 200 Tcf of potentialgas reserves from development.

©Copyright 2001 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press, Inc.