Introduction: What industry leaders expect for 2025

Compiled by Kurt S. Abraham, Editor-in-Chief 

Last year at this time, we remarked that 2023 had been “a rather peculiar year.” We noted that while the U.S. rig count for 50 weeks had fallen 4.6% when compared to the same period in 2022, the country’s oil production had risen 10.9%, to 13.2 MMbpd in the same timeframe.  The actual average for 12 months in 2023 was 12.935 MMbpd.  

For 2024, we find that what was peculiar last year is now the status quo. The rig count has slipped another 5%, tallying 589 units on Dec. 20, 2024, compared to 620 a year earlier. And again, like 2023, U.S. oil production has risen despite a lower number of rigs running. However, the output increase has not been nearly as spectacular, rising just 206,000 bpd to 13.141 MMbpd (as of September), for a 1.6% gain. 

Canadian activity has consistently been running a bit ahead of 2023’s pace. As of Dec. 20, Canada’s active rigs totaled 166, up 13.7% from 146 units a year earlier. Canadian oil production had risen to 4.851 MMbpd, up 4,1% from the 4.659-MMbpd rate of a year earlier. This performance is a testimonial to the oil and gas development potential of Canada, despite the constant harmful and punitive measures imposed on the industry by the regime of Prime Minister Justin Trudeau. On the positive side, there is growing opposition to Trudeau, and it is conceivable that when Parliament meets again in January, that his fragile coalition may fall apart, leaving him exposed to a potential election. 

Meanwhile, international activity outside the U.S. and Canada had been expanding during second-half 2023 and first-half 2024, as some of the IOCs repurposed spending and projects to other regions. However, that trend has stopped and actually reversed. The most recent rig count in November shows a figure of 919, down 6% from 978 units in November. Three regions (Middle East, Latin America and Africa) were lower, while Europe held steady and Asia-Pacific notched a one-unit gain.   

The Trump effect. We cannot possibly overstate the fact that the election of former President Donald J. Trump to a second, non-consecutive term is going to change the oil and gas outlook significantly, not just in the U.S. but globally. Trump is an unabashed supporter of oil and gas development in the U.S., and he is also in favor of greatly expanding U.S. LNG exports. Look for his incoming administration to rescind or alter a number of harmful executive orders and rulemakings that the Biden regime imposed during the last four years.  

We also believe that Trump’s pro-industry approach is reflected in his selection of Liberty Energy’s Chris Wright to be Secretary of Energy and North Dakota Governor Doug Burgum to be Secretary of the Interior. Wright is known as an advocate for using energy, including oil and gas, to improve standards of living and pull people out of poverty. Burgum is very pro-oil-and-gas and has gained significant experience dealing with the industry by virtue of all the activity in the Bakken shale. One of Burgum’s immediate tasks will be to fix the mess involved with the five-year offshore leasing plan. 

Advisors’ perspectives. As occurs every year at this time, our core group of advisors on World Oil’s Editorial Advisory Board has attempted to analyze what has occurred in the global E&P industry over the last 12 months while also working to predict what may happen in the coming year. One noticeable change this year is that our advisors are putting less emphasis on discussing ESG and sustainability topics and putting much more focus on operational and regulatory concerns.   

Among the sampling of topics from our advisors, we find such things as improving and expanding energy education; improving subsea production while keeping emissions low; keeping oil growth ahead of demand; the health of the UK North Sea, as the regime continues to jeopardize its future; whether CCUS might be in danger of failing; the ability of the equipment and service sector to continue to embrace innovation while leading the energy expansion; and overcoming the regulatory hurdles thrown up in the last four years in the U.S. 

In spite of any concerns voiced in these op-eds, our advisors, as a group, are very optimistic that 2025 will not only be better than 2024 but be a true breakout year for the global upstream industry. As always, we invite you to read the following advisor perspectives for all the details.