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Stripper well producers call for end to export ban

North American Oil | by Tim Daiss

US oil storage capacity is filling up and stripper well operators are among those calling for the US crude export ban to be lifted in order to ease the glut.

The debate over the 40-year ban on US crude oil exports is intensifying. US oil storage is reaching record levels and, until this week, crude production was still rising despite a reduction in the number of drilling rigs in operation after oil prices dropped nearly 60% since mid-June 2014. Also, the opening up last year of condensate, a minimally processed ultra-light oil, for exports has intensified calls to remove the crude export ban entirely.

However, there are both clear winners and losers as long as the ban remains in place. US refiners are among the main beneficiaries of the ban. However, a new study by Rice University has suggested that this comes at the expense of US producers.

The ban is particularly hitting shale drillers hard, the report said, while lifting
the restrictions would increase US production as well as prices for domestically produced oil. The ban is also adversely affecting stripper and marginal well producers. A stripper well is one that is near the end of its economically useful life but is still
worked in an attempt to tap as much oil remaining in the well as possible. Around
11% of US domestic crude production is derived from stripper wells, though
maximum average output at these wells does not exceed 15 barrels per day of
oil. Full story