Last checked at 
* Says growth this year to fall well short of EIA forecast
* Slowing growth could spur takeovers of smaller shale
players
-Papa
* Says shale companies need $55/bbl to break even
By Marwa Rashad
DHAHRAN, Saudi Arabia, Jan 14 (Reuters) - U.S. oil output
growth is expected to slow over the next five years, likely
prompting oil majors to "gobble up" smaller shale oil producers,
Mark Papa, shale pioneer and non-executive chairman of
Schlumberger, told Reuters.
U.S. output surged to nearly 13 million bpd last year,
making it the world's largest producer.
The Energy Information Administration (EIA) has forecast
U.S. oil production growth at 1 million barrels per day (bpd) in
2020, with shale accounting for most of the increase.
But Papa, boss of the world's largest oilfield services
company, expects U.S. output to grow by just 400,000 bpd in 2020
and by 100,000-500,000 bpd per year through 2025, depending on
future oil prices.
"What we are seeing is that there has been a kind of
inflection in the growth path for U.S. oil production, mainly
due to inflection in shale oil growth," Papa said in an
interview in Saudi Arabia.
He cited the shorter life and high decline rates of shale
reservoirs such as the Bakken in North Dakota and the Eagle Ford
in Texas.
"I'm not saying that the U.S. shale oil will go away but I'm
saying it will become a less powerful force as we go through the
2020s than it was in the previous decade," he said.
Global demand is seen to grow by about 1 million bpd a year
over the next five years, but that growth in demand would be met
more by OPEC oil producers, he said.
Over the last decade, the shale revolution turned the United
States into a major force in energy exports, however, it failed
to boost profits, which has discouraged investors.
The shale industry was squeezed by an OPEC price war that
began in 2014, sending U.S. crude prices below $30 per barrel at
one point.
That drove shale companies to cut costs and become more
efficient.
Now, with investor returns flagging, the industry no longer
believes in drilling its way to success even at higher prices
and financing for new production has been sharply limited.
Analysts believe that even if oil prices were to remain
above $60 a barrel this year, it will not spur another
production spurt because of the pressure for returns.
Papa said U.S. shale crude producers need a price of $55 per
barrel to break even, above which they can achieve an adequate
return on investment.
Over the last couple of years oil prices have generally been
lower, what has reduced the amount of capital available to the
industry.
"What is likely to happen over the next 5 to 10 years is
that some of the smaller companies will get consolidated... get
gobbled up by the majors," Papa said.
"Today Exxon Mobil, Chevron and even BP are becoming bigger
in the shale oil business and probably five years from now those
three companies will be even bigger and there will be less of
the small companies."
Papa also expects the rise in gas flaring and venting in the
Permian Basin in Texas to end by mid-2020 helped by a slowdown
in the drilling of new wells and an increase in gas pipeline
capacity.
(Reporting by Marwa Rashad; editing by Rania El Gamal and Jason
Neely)
