The shale boom not only sent shockwaves across Texas’ oil economy, it sent ripples throughout the world of oil technology. Hydraulic fracturing, also known as horizontal drilling, became the go-to method for energy companies across the world for extracting untapped crude. The rise of fracking put older, less lucrative methods into retirement.

Yet the oil industry is seeing a resurgence of some of these phased-out methods, namely offshore drilling.

“Because offshore drilling was so expensive, it basically got priced out of the market, so what we saw was those projects basically drying up,” says Matt Smith, director of Commodity Research at ClipperData. “But what is essentially happening now, is because there are so many rigs that are used offshore that are lying unused, the price of renting those have dropped.”

Smith says that low prices have allowed oil companies to “bargain hunt” for offshore rigs. Lowered production costs can thus account for an oil market that may be slowly diversifying.

“The largest allocation of cash is still going to be going after that shale, it is just going to also start filtering through into some of that offshore drilling,” Smith says.

What you’ll hear in this segment:

– Why offshore drilling is closing the gap with fracking in the oil market despite higher costs

– What this means for the future of Texas oil producers

– What kind of impact a shifting marketplace has on OPEC

Written by Lila Weatherly.

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