Oil companies to invest $28 billion in Eagle Ford Texas play

Fuel Fix:

The oil and gas industry will continue zeroing in on the Eagle Ford Shale, investing an estimated $28 billion in the South Texas region next year.

The field has emerged as among the hottest in the nation for crude oil production. But a new report from Wood Mackenzie, a global energy research firm, puts the mammoth infusion into perspective: 27 percent of the industry’s capital investment in the lower 48 states next year will go to the Eagle Ford.

“When you throw out a number like $28 billion, it’s a phenomenal amount going into this area of Texas,” said Callan McMahon, an analyst for Wood Mackenzie in Houston.

The spending will go for everything from drilling and hydraulic fracturing to building pipelines to coastal refineries.

Between 2012 and 2015, the industry likely will sink more than $116 billion into the Eagle Ford — more than the cost of developing the Kashagan offshore field in Kazakhstan, which has been called the world’s most expensive standalone energy project.

Companies are chasing crude oil and natural gas liquids production – especially in the sweet spots of Karnes, Gonzales and DeWitt counties, which are producing half of the play’s liquids, he said.

Friday, the Baker Hughes Rig Count showed 238 drilling rigs working in the Eagle Ford, including 37 in Karnes County, 24 in Gonzales County and 22 in DeWitt County.

Eric Potter, an associate director at the Bureau of Economic Geology at the University of Texas at Austin, said that the Eagle Ford appears to have plenty of space for more wells and associated investment, even in areas that have already snagged the industry’s attention.

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Because the Eagle Ford play is relatively close to the coast and refineries it has some advantages over oil plays further inland that require higher transportation cost.  There is some infrastructure already in place and adding addition will only make it more efficient.  The oil being produced is "light" rather than "heavy" which makes it easier to get it out of the ground and transport it.  Once at the refinery it is also easier to turn it into products for sale.  Besides the jobs created in the oil patch itself it has increased employment in Houston San Antonio and Corpus Christi which has the closest port.  San Antonio has seen over 4,000 jobs created relative to the Eagle Ford play.