Bryan Sheffield made his fortune drilling wells in America’s largest oilfield, much like his father and grandfather before him. But as the shale boom slows in the Permian basin, the oil executive is leading efforts to export the US fracking revolution overseas.
Sheffield is the biggest shareholder in Tamboran Resources, which holds drilling rights over almost 2mn acres of land in northern Australia’s Beetaloo basin. Tamboran expects to start selling gas from a pilot shale project in the area later next year.
Formentera Partners, the private equity group he co-founded, is also exploring opportunities in shale fields in Venezuela following Donald Trump’s removal of strongman leader Nicolás Maduro.
“The Permian has been a massive wealth creator for America, but we’ve drilled the best prospects and are running out of inventory,” said Sheffield, who founded Parsley Energy before selling it for $7.5bn including debt in 2021.
“Americans will need to explore outside of America in the next three to five years and use their expertise to develop new shale basins,” he added.
The shale boom began in the mid-2000s when hydraulic fracturing and horizontal drilling unlocked vast reserves in sedimentary rock, enabling the US to leapfrog Saudi Arabia and Russia and become the world’s largest producer of oil and gas. It created tens of thousands of jobs and bolstered US energy security by breaking its dependence on the Opec oil cartel.
But the expansion phase appears to have peaked, with the US Energy Information Administration forecasting a year-on-year flattening of production at 13.6mn barrels a day in 2026 and a fall to 13.2mn barrels in 2027, as US drillers cut costs and slow output amid weak crude prices.
“There’s no expectation of material growth [in US shale], and some foresee gradual decline starting in the near term,” said Ruaraidh Montgomery, analyst at market intelligence firm Welligence.
To counter this, he continued, “some American shale companies are now looking to diversify abroad and partner with local companies, which gives them first-mover advantage over other US rivals”.
Experts say some of the best opportunities are in the Middle East, where EOG Resources, a Houston-headquartered company with assets in the Permian, has signed deals with the national oil companies of the United Arab Emirates and Bahrain.
Harold Hamm, the shale pioneer behind Continental Resources, has struck a partnership with Turkey’s national oil company and snapped up acreage in Vaca Muerta, the Argentine formation where Chevron is also invested.
Continental plans to invest $200mn a year drilling in Argentina.
“We do know there is a real and recognised degradation in the inventory quality of the US unconventional resources,” said Doug Lawler, chief executive of Continental Resources, adding that US oil production is set to plateau, prompting operators to look abroad.
But the challenges of operating outside of the US, where relentless competition has driven down costs and created a huge logistical ecosystem for shale drillers, are substantial.
“The biggest challenge is approach,” said one executive with knowledge of the EOG partnership with state-run Adnoc. “We need to approach it with a completely different mindset. We need to carve out some time and allow a different way of running the business.”
While oil services companies such as Halliburton and SLB provide above-ground expertise, only Adnoc’s drilling operator is permitted to drill for oil and gas.
Adnoc Drilling has brought in rigs from overseas to learn from their techniques, including from Great Wall Drilling of China and H&P, the largest onshore driller in the US, and experimented with techniques such as parallel drilling and parallel fracking, where multiple wells are drilled at the same time.
The UAE company has also noted how the US teams pump for the full 24 hours a day, although it has not yet adopted the electric fracking fleets that have become common in the US or the aggressive high-temperature, high-pressure and horizontal drilling techniques that have delivered results.
Asked if US shale teams would be able to successfully export their skills overseas, one Gulf drilling expert said there would be “much more extended learning curves and significant cost leakage replicating what we have seen in the US”.
In Australia, Tamboran has brought in US hydraulic fracturing specialists Liberty Energy and H&P to boost efficiency. Baker Hughes, the US oil services company, became a partner on the project when it invested $10mn as part of Tamboran’s $56mn fundraising in October.
Sheffield, whose father Scott Sheffield founded Pioneer Resources, bought by ExxonMobil for $60bn two years ago, said he expected more US independents and oil majors to look at the Beetaloo basin once Tamboran starts selling gas.
“We’ll continue applying the American shale recipe and horizontal drilling techniques in Australia,” he said.
Chevron has been operating in Vaca Muerta — where crude production has grown from zero to 550,000b/d over a decade — since 2013.
“On my first visit I thought this just looks like the Delaware basin [in the Permian]: it’s large, very contiguous and the geology is exceptional,” said Bruce Niemeyer, president of Chevron’s shale operations.
Good geology is important to attract foreign investors but fiscal terms and the business environment are also key, say analysts. Argentina’s expropriation of a 51 per cent stake that Spain’s Repsol held in the state oil company YPF in 2012 highlighted political risks, they say.
The election of libertarian and pro-business president Javier Milei in 2023 has provided some comfort to US investors, although many are lobbying for improved fiscal terms and an end to capital controls.
Niemeyer conceded it was “more expensive for us to execute in Argentina than in the Permian”, with costs about 35 per cent higher.
But Chevron was making progress, with production set to increase from the 51,000b/d pumped in 2024.
“There’s potential for all of our Argentine production to triple through 2035 with the right things happening,” he said.
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