U.S. supermajors ExxonMobil and Chevron have both announced ambitious plans to significantly increase production output from the Permian basin in the U.S.
Chevron announced expectations for significant cash flow growth, disciplined spending, and expanding production over the next five years.
Chevron’s outlook is supported by strong performance in the Permian Basin, where the company has added almost 7 billion barrels of resource and doubled its portfolio value over the past two years. Permian unconventional net oil-equivalent production is now expected to reach 600,000 barrels per day by the end of 2020, and 900,000 barrels per day by the end of 2023.
The company’s unique position in the Permian is “characterised by long-held acreage, zero-to-low royalty on more than 80 per cent of our land position, and minimal drilling commitments,” said Jay Johnson, executive vice president, upstream at Chevron.
ExxonMobil said it has revised its Permian Basin growth plans to produce more than 1 million oil-equivalent barrels per day by as early as 2024 – an increase of nearly 80 percent and a significant acceleration of value.
The size of the company’s resource base in the Permian is approximately 10 billion oil-equivalent barrels and is likely to grow further as analysis and development activities continue.
“We’re increasingly confident about our Permian growth strategy due to our unique development plans,” said Neil Chapman, ExxonMobil senior vice president. “We will leverage our large, contiguous acreage position, our improved understanding of the resource and the full range of ExxonMobil’s capabilities in executing major projects.”
ExxonMobil is actively building infrastructure to support volume growth. Plans include construction at 30 sites to enhance oil and gas processing, water handling and ensure takeaway capacity from the basin. Construction activities include central delivery facilities designed to handle up to 600,000 barrels of oil and 1 billion cubic feet of gas per day and enhanced water-handling capacity through 350 miles of already-constructed pipeline.
“These investments support growth plans and ensure that as production levels continue to rise, we are well positioned in processing and transportation capacity,” Chapman added.