Oil production is ramping up in light of sanctions against Russia

We’ve all noticed gas prices rising at the pump. A great deal of those increases is due to the supply chain disruptions and sanctions brought about by Russia’s war on Ukraine. Although the U.S. only buys about 700,000 barrels of crude and refined oil from Russia each day, the uncertainty has resulted in prices rising to over $100 per barrel. That translates to $4 per gallon in Texas.

The American Petroleum Institute, an oil and gas trade group, is ready to ramp up domestic oil production to counter the power Russia has over our prices.

“We share the goal of reducing reliance on foreign energy sources and urge policymakers to advance American energy leadership and expand domestic production to counter Russia’s influence in global energy markets,” said the group’s president recently. Nevertheless, he complained that regulation hinders the industry’s ability to ramp up output quickly.

Others question whether ramping up production here in the U.S. would actually lower prices at the pump in the short term. After all, oil is sold on a worldwide open market, not reserved for its country of origin.

Whether or not it’s going to impact prices, oil and gas companies are already preparing to increase their output. What does that mean for landowners in the Permian Basin?

Keep an eye out for energy leasing opportunities

As oil and gas companies seek to increase their production, they will likely be looking for new exploration and drilling opportunities. That means they could be coming to your area and buying up or leasing properties, particularly in the Permian Basin.

They may propose a blanket agreement with multiple landowners in the area. They may even hold a barbecue or another event to get landowners in the mood to sign.

Before you sign on to a potentially lucrative opportunity, you owe it to yourself to have the agreement vetted by your own attorney. Hire one who has lots of experience in energy law, specifically in drafting and negotiating energy leases and purchases.

Remember that a lease prepared by an oil company could easily be drafted in the company’s interest, not yours. Your oil and gas lawyer can make sure you understand everything included in the lease and may be able to negotiate more favorable terms.