- North Dakota oil producers face new pressures to delay bringing back more of their recently curbed output after a U.S. court ruling this month put in jeopardy the pipeline that transports most of the region’s oil, executives and analysts said.
They were slowly restarting some wells when the court ruled the region’s main pipeline must face a new environmental review that could halt its operation for a year. Hess Corp, which has about 55,000 bpd of transportation on DAPL, said on Wednesday it can move all its Bakken output if the pipeline was shut, but that it would cost a few more dollars per barrel.
Producers will not be willing to commit to restarting closed wells or drilling news ones “unless they know more” on the pipeline’s future, said Nicholas O’Grady, chief executive officer at Northern Oil and Gas Inc, which has invested in about 7,000 wells in North Dakota’s Williston Basin. The current per barrel price of $40.14 is below the $46.54 that Deutsche Bank analysts estimate Bakken producers need to break even on new wells even before additional rail costs are factored in.
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