The Big Oil companies ExxonMobil and Chevron are keeping their promises to dominate the Permian Basin, rapidly ramping up production as smaller companies contend with declining drilling activity, muted oil prices and a skeptical Wall Street unwilling to finance their growth.
ExxonMobil has, by far, become the Permian’s most active driller with more than 50 rigs operating in the West Texas oil field, increasing production there by nearly 90% in 12 months, The Houston Chronicle reports. Chevron, along with Occidental Petroleum of Houston, is one of just two companies producing more than 420,000 barrels of oil equivalent per day from the region, the companies said Friday in their quarterly earnings reports.
The Permian, now the world’s most productive oil and gas basin, is producing about 4.2 million barrels of crude oil a day, more than one-third of the nation’s record output of more than 12 million barrels a day. The basin, the central focus of the shale boom, also is the country’s second-most prolific natural gas producer.
Small and midsize oil firms led the so-called shale revolution, proving horizontal drilling and hydraulic fracturing techniques. ExxonMobil and Chevron—and energy majors generally—came to shale slowly, but now they are using their deep pockets, size and diversified income to continue to invest in drilling projects in the Permian and drive growth there.
The boom in drilling in the basin comes as ExxonMobil, headquartered in Irving, California said its profits fell more than 20% in the second quarter, blaming low natural gas prices and smaller petrochemical profit margins. ExxonMobil’s petrochemical profits were the worst in 11 years because of a global glut in chemicals and plastics supplies. Read the full story.