Oil giants Chevron and Exxon Mobil made announcements of increasing their production in the West Texas and New Mexico field, with one-third of Permian production potentially under their control within five years.
Chevron expects shale production from the basin to reach 600,000 barrels per day (bpd) by the end of next year, 59 percent above current production, and 900,000 bpd by the end of 2023. That is a nearly 40 percent increase from its previous forecast. Its Permian portfolio has doubled in value over the past two years.
“The shale game has become a scale game,” Chevron chief executive Mike Wirth said in an interview. “The race doesn’t go to the one who gets out of the starting blocks the fastest. The race goes to the one who steadily builds the strongest machine.”
Chevron said it would hold annual spending this year and next year between $18 billion and $20 billion, and allow it to grow slightly from 2021 to 2023 to $19 billion to $22 billion.
And Exxon expects shale production by 2024 to produce the equivalent of more than 1 million barrels of oil per day in the basin, up from a forecast of 600,000 barrels by 2025. Exxon has 48 drilling rigs there and plans to raise that to 55 by year-end. The Irving, Texas-based company estimates that it can produce 10 billion barrels of oil in the basin.
“We’re increasingly confident about our Permian growth strategy due to our unique development plans,” stated Neil Chapman, Exxon’s senior vice president, in a written statement.
BP, Royal Dutch Shell and Occidental Petroleum are also focusing on the region.
Five years ago, Exxon, Chevron, BP, Shell and Occidental collectively made up about 9 percent of crude production from modern fracking techniques in the Permian, reported The Wall Street Journal. In October, the latest period for which relevant figures are available, they made up about 16 percent, according to data on ShaleProfile, an industry analytics platform.
