& Tobago


Very usefull links


News links




Dow Jones

Oil price



Views and News






Exxon, Chevron's big Permian output hike adds to OPEC's woes


Pumps jacks stand in the Permian Basin area in Texas, U.S.

- U.S. crude giants planning massive Permian output increases
- New flood of American barrels may further dilute OPEC's sway l

By Kevin Crowley and Javier Blas / Reuters

Petroleumworld 03 06 2019

Chevron Corp. and Exxon Mobil Corp. plan to sharply increase their oil production in the world's largest shale basin over the next five years, flooding markets with new supplies as demand growth is slowing.

Within hours of each other on Tuesday, the two largest energy companies in America announced they want to pump almost 2 million barrels a day combined in the Permian Basin of west Texas and New Mexico, a higher amount than most OPEC nations. Chevron plans to reach 900,000 barrels a day by 2023, while Exxon aims for 1 million by 2024.

“Our position in the Permian just continues to get better and underpins our resource base,” Chevron Chief Executive Officer Mike Wirth said in New York. The value of the company's Permian position has doubled over the past two years with reserve additions, he said.

The production surge from Exxon and Chevron appears likely to further weaken OPEC's grip on oil-market fundamentals and complicate the cartel's effort to control prices. It also shows the world's most sophisticated and well-funded exploration companies will grow shale at a time when independent specialists, for years the pioneers of the new production techniques, are scaling back on exploration to conserve cash.

Saudi Arabia and the rest of OPEC made the same mistake as Big Oil about U.S. shale, when they largely ignored it as a short-term blip a decade ago. As U.S. production soared above the 1970s-era records, both the cartel and Big Oil have had to face the new reality of high growth rates from previously overlooked fields from Texas to North Dakota.

“Exxon and Chevron's ambitious targets for Permian production are yet another reminder that the U.S. shale revolution -- already among the largest new sources of supply in history -- still has a ways to go,” said Jason Bordoff, director of the Center on Global Energy Policy at Columbia University in New York.

The Permian is “challenging OPEC's ability to prop up prices while retaining market share,” Bordoff, a former Obama administration energy official, added.

Once known for megaprojects in deep oceans and far-flung corners of the globe, Chevron affirmed its commitment to homegrown shale drilling with a target that represents a nearly 40 percent increase in Permian output in about five years. In fact, the Permian and other Western Hemisphere shale fields will account for more than 80 percent of the company's new production.

Exxon disclosed an even more ambitious Permian even as the oil giant is spending on major global projects from South America to Papua New Guinea. It said its Permian wells are worth the money: oil as cheap as $35 a barrel is sufficient to generate a 10 percent profit.

U.S. crude has averaged about $53 this year and hasn't flirted with the $35 level since the very depths of the 2014-2016 market collapse three years ago.

The announcements underscored how the world's most sophisticated and well-funded exploration companies are muscling in on a shale region that was regarded as a backwater as recently as 10 years ago.

“We don't have resource anxiety, we won't chase lower return investments and we don't need to ramp up spending to restock a diminishing reserve base,” Chevron 's Wirth said.

Globally, Chevron will increase capital spending to as much as $22 billion a year through 2023, about 10 percent above current levels, as it walks the line between expanding production and investor payouts. The company expects to raise dividend payments by 6 percent this year.

Wirth delivered an apparent jab at Exxon's plan to spend more than rivals on projects that won't deliver much growth for years. “Our investors don't need to wait for several years for the story to come together,” he said. “We're delivering now.”

Least-Loved Stock

Exxon's revised Permian target is 400,000 barrels larger and a year sooner than the company's prior estimate. Exxon plans to expand its fleet of rigs plying Permian sites by 15 percent this year to 55, making it far and away the most-active driller in the region.

Exxon CEO Darren Woods is scheduled to meet with analysts on Wednesday. He faces the daunting task of defending the least-favored major integrated oil company among analysts, almost two-thirds of whom don't recommend buying Exxon shares, according to data compiled by Bloomberg.

The company had a disastrous 2018: Production dipped to a decade low in the second quarter and the stock posted its worst annual performance since Ronald Reagan became president. This year, Exxon's shares are up about 18 percent in New York after falling 0.2 percent to $80.19 on Tuesday.

Chevron, up 13 percent this year, gained 1 percent to $123.29.

— With assistance by Joe Carroll


Original article



We invite you to join us as a sponsor.

Circulated Videos, Articles, Opinions and Reports which carry your name and brand are used to target Entrepreneurs through our site, promoting your organization’s services. The opportunity is to insert in our stories pages short attention-grabbing videos, or to publish your own feature stories.


Story by Kevin Crowley and Javier Blas from Bloomberg.

bloomberg.com 03 05 2019


We invite all our readers to share with us
their views and comments about this article.


Write to editor@petroleumworld.com

By using this link, you agree to allow PW
to publish your comments on our letters page.

Any question or suggestions,
please write to: editor@petroleumworld.com

Best Viewed with IE 5.01+ Windows NT 4.0, '95, '98,ME,XP, Vista, Windows 7,8,10 +/ 800x600 pixels

Twitter: @petroleumworld1



Contact: editor@petroleumworld.com,

Editor & Publisher:Elio Ohep/
Contact Email: editor@petroleumworld.com

CopyRight © 1999-2019, Elio Ohep A. - All Rights Reserved. Legal Information

PW in Top 100 Energy Sites

CopyRight©1999-2019, Petroleumworld ™  / Elio Ohep - All rights reserved



This site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission fromPetroleumworld or the copyright owner of the material.