ExxonMobil has announced that it plans to triple total daily production to more than 600 000 oil-equivalent barrels by 2025 from its operations in the Permian Basin in West Texas and New Mexico. Tight oil production from the Delaware and Midland basins will increase five-fold in the same period.
Recent changes in the US corporate tax rate have created an environment for increased future capital investments, including ExxonMobil’s plan to spend more than US$2 billion on transportation infrastructure to support its Permian operations.
The increased volumes are expected to be driven by reduced drilling costs, technology improvements and expanded acreage. ExxonMobil has amassed a large, contiguous acreage position in the prolific, multi-layered oil zones of the Delaware and Midland basins.
“Our geographic and competitive advantages in the Permian position the company for strong growth and long-term value creation,” said Sara Ortwein, President of ExxonMobil’s XTO Energy subsidiary. “We can deliver profitable production at a range of prices, and we have logistics and technology advantages over our competitors.”
Through its US$6 billion Bass companies acquisition in 2017, ExxonMobil added an estimated resource of 3.4 billion boe, with upside potential in multiple additional prospective horizons. A large majority of the development drill wells from the purchase are projected to have strong returns at oil prices below current levels.
“With this production growth, we are well positioned to maximise value as increased supply moves from the Permian to our Gulf Coast refineries and chemical facilities where higher-demand, higher-value products will be manufactured,” Ortwein added.
The company plans to use the increased production to provide low-cost supply and feedstocks for its downstream and chemical operations in Baytown, Beaumont and Mt. Belvieu, Texas, and Baton Rouge, Louisiana. These facilities manufacture polyethylene to meet growing demand for high-performance plastics and advanced synthetic lubricant base stock products.
As part of its Permian-focused infrastructure, ExxonMobil recently acquired a crude oil terminal in Wink, Texas that will handle Permian crude oil and condensate from Delaware basin sources near the Texas-New Mexico border for transport to Gulf Coast refineries and marine export terminals.
The company plans to expand the Wink terminal and add infrastructure upgrades that will move ExxonMobil and third-party production from the Delaware, Central and Midland basins in the Permian to its operations and other market destinations in the Gulf Coast region.
Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/31012018/exxonmobil-aims-to-triple-permian-production-by-2025/