Big oil companies like Exxon and Chevron came late to the party in the Permian basin, but are now heavily invested in the oil play. Faced with certain difficulties ahead, they are looking to “change the game.” Ed Crooks reports for The Financial Times:
The Permian’s oil output has already shown prodigious growth in recent years: it has doubled since the summer of 2016, to 4m barrels a day, or roughly a third of total US daily production. The announcements from Exxon and Chevron were a signal that the boom would continue.
“It is quite a stunning development, in terms of the scale and the scope for acceleration,” said Lysle Brinker, an equity analyst at IHS Markit. “This Permian opportunity is something that these companies haven’t had for a very long time.”
But Exxon and Chevron are betting heavily on the region at a time when concerns about the financial and technical challenges facing the shale industry have been growing.
In their annual presentations to analysts this week, the companies made the case that — for different reasons — they could overcome those problems and achieve both strong growth in production and increased returns on investment.
Darren Woods, Exxon’s chief executive, told journalists after his presentation: “We’re changing the way that game gets played, and along with it the returns that we generate in that game.”
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