is roaring activity once again is the soundtrack out here in West Texas and Southern New Mexico. The sound signaling that after years of bankruptcies, layoffs and cut backs, the American shale boom is back.>> I'm Ernie Scheyder with Reuters News, just north of Fort Stockton, Texas.
While the global oil industry is struggling to match supply and demand, it's oil producers here in West Texas that are setting their own rules, boosting drilling at the fastest pace in years. Here, at this well, operated by Scandrill, which you can see right over my shoulder, crews are drilling deep into the Permian Basin, the largest oilfield in the United States.
>> Oil producer, Lilis Energy plans to add 12 wells and expand production sevenfold in 2017. A complete turnaround for a company that, a few years ago, wasn't even able to pay its workers. It barely remained afloat. That's when oil prices tumbled from around $60 per barrel to below 30, partly because OPEC and its allies, including Russia decided to keep global production high, even as demand slipped.
Many described the move as a price war designed to punish America's oil industry.>> In 2015, through the middle of 2016, oil prices took a precipitous drop. And the basins throughout the country, the vast majority, they were not economic anymore.>> But OPEC this year finally agreed to cut production, helping to stabilize global oil prices.
That fact, and basic geology, means the Permian Basin is now back in action. It's relatively cheap to drill out here, and a change last year in long-standing US law now allows American oil producers to export their crude overseas. The giants are getting into the land rush as well.
Exxon Mobil, the world's largest publicly traded oil producer, earlier this year paid nearly $7 billion to double its holdings in the Permian Basin.
t hanging over all of this activity is a question, how long will the higher oil prices last?>> The eyes of the global oil industry are focused here on West Texas, especially as oil production increases.
Texas right now pumps more than 2 million barrels of oil per day and that number is rising.>> OPEC leaders are meeting in Vienna later this month to decide whether and how long to extent their production cuts. A change in policy, while unlikely, could upend the Permian shale boom all over again.