# Crude oil: Extraction

How fracking turned America's shale into a gusher

Source page: https://www.materialinsights.org/energy/crude_oil/extraction/

How fracking turned America's shale into a gusher What this tab covers How it is mined, drilled or grown, and processed into a tradeable form: the main methods compared, their unit economics, by-products, and the companies that do this work globally and in India.

Oil forms where organic-rich sediments are buried and heated, then migrates into porous traps such as sandstone or limestone sealed by tight rock. Most comes from conventional wells, where reservoir pressure, pumps and water injection push crude up. Horizontal drilling and hydraulic fracturing unlocked US shale, whose wells decline fast and must be drilled continuously. Canada adds bitumen from oil sands, mined or steamed out. Crudes differ in density and sulphur, so each grade suits different refineries. Associated gas and natural gas liquids come up with the oil. Drake's well in Pennsylvania struck oil at 69 feet in August 1859 (Yergin).

Crude comes from four broad kinds of source. Conventional onshore fields, many in the Middle East and Russia, are the cheapest and still supply the largest share. Offshore fields, from shallow shelves to deepwater basins in Brazil, Guyana and the Gulf of Mexico, need large platforms or floating production vessels and long lead times. Shale or tight oil, mainly in the United States, is drilled with horizontal wells and hydraulic fracturing; each well declines fast but can be added within months. Oil sands in Canada are mined or steamed out as bitumen. All crude then goes through the same refining step, which turns it into tradeable products.

#### Methods compared

| Method | Share of supply | Typical scale | Recovery / efficiency | By-products | Unit cost |
|---|---|---|---|---|---|
| **Conventional onshore fields (natural flow, waterflood)** | largest single category; null for a precise world share (not found in sources checked) | Saudi Aramco maximum sustainable crude capacity 12.0 mb/d (Aramco 2025) | primary plus waterflood recovery commonly 30-50% of oil in place (indicative; basis: typical range in petroleum engineering texts, field-specific) | associated gas, NGLs, produced water | Gulf upstream lifting costs of a few dollars per barrel (indicative; basis: Saudi Aramco 2019 IPO prospectus reported an average upstream lifting cost of about $2.8/boe in 2018) |
| **Offshore shelf and deepwater** | roughly a quarter to a third of world crude (indicative; basis: commonly cited industry estimates, not from a 2025 statistical source) | a single Guyana FPSO handles 220-250 kb/d; ExxonMobil's Guyana output passed 700 kb/d in Q3 2025 (OilNOW) | null (field-specific) | associated gas, often reinjected | full-cycle breakevens for new deepwater projects commonly $35-50/bbl Brent (indicative; basis: consultancy breakeven surveys such as Rystad Energy, not checked for 2025) |
| **Shale and tight oil (horizontal drilling + fracking)** | most of US crude growth since 2010; the US produced 20.1 mb/d of liquids in 2024 (Energy Institute) | a Permian horizontal well costs roughly $6-8 million and yields several hundred thousand barrels over its life (indicative; basis: typical operator guidance, not checked against a 2025 report) | typically under 10% of oil in place (indicative; basis: commonly cited range for tight oil) | associated gas and NGLs (Permian gas is a major US LNG feed) | breakeven for new wells $61-70/bbl WTI by basin, $65 on average (Dallas Fed Energy Survey, March 2025) |
| **Oil sands and extra-heavy oil** | Canadian oil sands reserves are 161 bn bbl of Canada's 168 bn bbl (Energy Institute, end-2020) | single mining operations of 100-300 kb/d (indicative; basis: capacities of the large Athabasca mines) | mining recovers about 90% of bitumen in the mined area; SAGD roughly 50-60% (indicative; basis: commonly cited operator and Alberta regulator ranges) | petroleum coke, sulphur | operating costs roughly C$20-30/bbl at established sites (indicative; basis: Canadian oil sands operators' reported cash operating costs) |

#### How each method works
**Conventional onshore fields (natural flow, waterflood)**

Vertical or deviated wells tap porous reservoirs under pressure. As pressure falls, operators inject water or gas to sweep oil to producers. Giant fields such as Ghawar have produced for 70 years. Spare capacity sits mostly in such fields in Saudi Arabia and the UAE, which can be opened in weeks.

Lowest cost and longest life, but concentrated in a politically exposed region and behind chokepoints.
 Aramco CEO message 2025 (capacity); Aramco 2019 prospectus (lifting cost, indicative) **Offshore shelf and deepwater**

Fixed platforms in shallow water, or floating production, storage and offloading vessels (FPSOs) tied to subsea wells in water up to 3,000 m deep. Projects take 4-10 years from discovery to first oil, then plateau for years. Brazil's pre-salt and Guyana's Stabroek block are the growth centres.

Large, long-lived volumes with low decline, but high upfront capital and long lead times.
 OilNOW Q3 2025; industry breakeven surveys (indicative) **Shale and tight oil (horizontal drilling + fracking)**

A 2-3 km horizontal well is fracked in dozens of stages to crack tight rock. Output peaks in the first months and falls 60-70% in the first year, so operators must keep drilling to hold output flat. This makes US supply respond to price within 6-12 months.

Fast, flexible supply that caps price spikes; but steep declines and investor discipline limit growth.
 Energy Institute 2025; Dallas Fed Energy Survey 2025 (indicative) **Oil sands and extra-heavy oil**

Shallow bitumen in Alberta is strip-mined and washed with hot water; deeper deposits are produced by steam-assisted gravity drainage (SAGD). The bitumen is upgraded or diluted and piped south. Venezuela's Orinoco belt holds similar extra-heavy oil.

Decades-long flat output with no exploration risk, but heavy, high-carbon and pipeline-constrained.
 Energy Institute Statistical Review 2025 (reserves); industry ranges (indicative) Unit economics are indicative ranges from the sources named; costs vary widely by deposit, region and year.

#### Who does it: global

| Company | Country | Activity | Volume | Year | Source |
|---|---|---|---|---|---|
| **Saudi Aramco** | Saudi Arabia | upstream production, refining, trading | 12.9 million boe/d total hydrocarbons | 2025 | [Aramco full-year 2025 results (via Enerdata)](https://www.enerdata.net/publications/daily-energy-news/saudi-company-aramco-reports-12-profit-drop-2025-amid-lower-oil-prices.html) |
| **ExxonMobil** | US | upstream (Permian, Guyana), refining, chemicals | 4.736 million boe/d net production | 2025 | [ExxonMobil 2025 results (via Rigzone)](https://www.rigzone.com/news/which_usa_oil_major_produced_the_most_in_2025-18-feb-2026-183016-article/) |
| **Chevron** | US | upstream (Permian, Kazakhstan, Hess assets), refining | 3.723 million boe/d net production | 2025 | [Chevron 2025 results (via Rigzone)](https://www.rigzone.com/news/which_usa_oil_major_produced_the_most_in_2025-18-feb-2026-183016-article/) |
| **Shell** | UK | upstream, LNG, refining, trading | 2.801 million boe/d oil and gas production | 2025 | [Shell Q4 and full-year 2025 press release](https://www.nasdaq.com/press-release/shell-plc-publishes-fourth-quarter-2025-press-release-2026-02-05) |
| **ConocoPhillips** | US | upstream (shale, Alaska, LNG stakes) | 2.375 million boe/d production | 2025 | [ConocoPhillips 2025 results (via Rigzone)](https://www.rigzone.com/news/which_usa_oil_major_produced_the_most_in_2025-18-feb-2026-183016-article/) |

#### Who does it: India

| Company | Country | Activity | Volume | Year | Source |
|---|---|---|---|---|---|
| **ONGC** | India | upstream (Mumbai High, western offshore, onshore Gujarat and Assam) | 20.5 Mt crude incl. JV share (domestic) | FY2026 | [ONGC Annual Report FY2026, Directors' Report (overseas arm ONGC Videsh added 6.9 Mt)](https://www.indiainfoline.com/company/oil-natural-gas-corpn-ltd/reports/directors-report) |
| **Oil India** | India | upstream (Assam, Arunachal, Rajasthan); owns Numaligarh refinery | 3.45 Mt crude | FY2026 | [Oil India 67th AGM (PSU Connect)](https://www.psuconnect.in/financial/oil-india-outlines-growth-roadmap-at-67th-agm-targets-10-mmtoe-by-decade-end) |
| **Reliance Industries** | India | refining and petrochemicals (Jamnagar, world's largest refining site) | 80.5 Mt O2C throughput | FY2025 | [Reliance FY2025 results (Finology summary)](https://ticker.finology.in/discover/market-update/reliance-fy25-results-overview) |
| **Indian Oil Corporation** | India | refining, pipelines, fuel retail | 75.45 Mt refinery throughput (standalone) | FY2026 | [IOC FY2026 results press release](https://iocl.com/NewsDetails/59422) |
| **Bharat Petroleum (BPCL)** | India | refining (Mumbai, Kochi, Bina), fuel retail | 41.15 Mt refinery throughput | FY2026 | [BPCL FY2026 results press release](https://www.bharatpetroleum.in/images/files/190526-press-release-bpcl-reports-increase-in-pat.pdf) |

India produced 0.73 mb/d but consumed 5.62 mb/d in 2024, so it imports about 87% of its oil (Energy Institute 2025). Its refiners run above nameplate and export products: India supplied 8.9% of world refined-product export value in 2024 (UN Comtrade).

## Other sections

- [Summary](https://www.materialinsights.org/energy/crude_oil/index.md)
- [Energy overview](https://www.materialinsights.org/energy/crude_oil/energy/index.md)
- [Correlation](https://www.materialinsights.org/energy/crude_oil/correlation/index.md)
- [How energy resides](https://www.materialinsights.org/energy/crude_oil/resides/index.md)
- [Abundance](https://www.materialinsights.org/energy/crude_oil/abundance/index.md)
- [Fluctuation in time](https://www.materialinsights.org/energy/crude_oil/time/index.md)
- [Across the Earth](https://www.materialinsights.org/energy/crude_oil/geography/index.md)
- [Impact on nature](https://www.materialinsights.org/energy/crude_oil/nature/index.md)
- [Overview](https://www.materialinsights.org/energy/crude_oil/overview/index.md)
- [Production](https://www.materialinsights.org/energy/crude_oil/production/index.md)
- [Stocks](https://www.materialinsights.org/energy/crude_oil/stocks/index.md)
- [Cycles](https://www.materialinsights.org/energy/crude_oil/cycles/index.md)
- [Trading](https://www.materialinsights.org/energy/crude_oil/trading/index.md)
- [Movement](https://www.materialinsights.org/energy/crude_oil/movement/index.md)
- [Criticality](https://www.materialinsights.org/energy/crude_oil/criticality/index.md)
- [Characteristics](https://www.materialinsights.org/energy/crude_oil/characteristics/index.md)
- [Emissions](https://www.materialinsights.org/energy/crude_oil/emissions/index.md)
- [Relationships](https://www.materialinsights.org/energy/crude_oil/links/index.md)