Texas oil regulators formally dismiss proposal for mandatory output cuts

Texas oil regulators on Tuesday formally dismissed the proposal for government-mandated production cuts, after a motion submitted by Commissioner Ryan Sitton was voted down by other two members.

This marks the end of a month-and-a-half-long saga that divided the shale industry over whether regulators should adopt OPEC-style production caps amid a historic collapse in crude prices.

However, the commission called for an open meeting on reducing flaring on June 16.

Read more: Texas regulators to vote on mandatory output cuts while oil price recovers

"Politics didn't prevent @txrrc from prorating. Politics prevented us from doing our job," Sitton wrote on twitter.

Sitton who first floated the idea of state-mandated oil production cuts had said on Monday that the three-member agency wasn’t prepared to vote on curtailing output in a process known as “pro-rationing,” in an interview on Bloomberg TV.

“This is dead,” Sitton told Reuters in another interview. “What we should have done six weeks ago now would no longer have the right impact. We lack the leadership between the three commissioners to get that done.”

Commission Chairman Wayne Christian said he would oppose state-mandated cuts and would stick to free market principles and vote no, while Commissioner Christi Craddick had worried about legal battles.

Two votes are needed to pass a measure.

Texas is the largest US oil-producing state, pumping about 5.4 million barrels per day (bpd) of crude. Last year its output rose by 600,000 bpd, to about 41 percent of the nation’s total.

Read more:

Shale producer Diamondback Energy to slash May output up to 15 percent

Texas oil regulator says mandated output cuts are ‘dead’

Texas regulators decline to force oil cuts after historic oil price crash

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Last Update: Wednesday, 20 May 2020 KSA 14:07 - GMT 11:07
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