HOUSTON — The Texas up stream oil and gas industry is firmly in recovery mode thanks to strong oil pric es, according to the latest Texas Petro Index (TPI).
However, persistent U.S. economic uncertainty and political hostility stemming from the catastrophic BP blowout offshore continue to keep the domestic oil and gas industry cautious.
“The rig count, drill ing permit applications and industry employment are all on the rise, and oil pricing is responsible for the lion’s share of that growth,” said Karr Ingham, the petroleum economist who created the TPI. “Yet the recovery continues to feel a bit tenuous because of remaining uncertainty about the pace of national economic recovery, as well as negativity in Congress and among Obama admin istration officials because of the prolonged BP disas ter unfolding in the Gulf of Mexico.”
Ingham noted that the number of Texans esti mated to be working in the state’s oil and gas industry — the sum of employment the oil and gas extrac tion and support sectors — recorded a 3.6-percent increase in May, the first year-over-year growth in employment in 15 months.
“Employment in the sup port sector is particularly important, because it in cludes employees of com panies on the front lines of Texas exploration and production activity — the oilfield service companies, drilling contractors,” Ing ham said. “That sector also achieved its first year-over year growth since January 2009, which is yet another signal that the industry is on the path to recovery after a debilitating, 14-month, 34-percent contraction.”
A composite index based upon a group of up stream economic indica tors, the Texas Petro Index increased in May for the fifth consecutive month to 204.3, from a low ebb in December 2009 of 188.2. Among leading TPI indica torsduring May:
Crude oil production in Texas totaled an esti mated 33.6 million barrels, 0.5 percent less than in May 2009. The value of Texas produced crude oil topped $2.38 billion, about 18.2 per cent more than in the same month a year earlier. Texas operators this year through May produced nearly 164.9 million barrels of oil, about2.0 percent less than in May 2009. Meanwhile, the value of Texas crude produced this year through May to taled more than $12.43 bil lion, about $5.0 billion more than in the first five months of 2009.
Estimated Texas natu ral gas output totaled 592.9 billion cubic feet, a year over- year decline of about 10.4 percent. The wellhead value of Texas-produced gas in 2010 through May totaled $14.19 billion, about $2.1 billion more than dur ing the first five months of 2009.
The Baker Hughes count of active rigs in Texas averaged 647, which was the 11th consecutive monthly increase and about 86.5 percent greater than in the same month last year. Drilling activity in Texas peaked in September 2008 at a monthly average of 946 rigs before falling to a trough of 329 in June 2009.
_ The number of Texans employed in the state’s oil and gas industry averaged 197,900, about 6,900 more than in May 2009, according to the Texas Workforce Commission. The number of upstream oil and gas workers in Texas peaked in December 2008 at 240,000. The Texas Petro Index is a service of the Texas Alliance of Energy Producers, the nation’s largest state association of independent oil and gas producers.
