Exxon Boosts US Permian Output
US major ExxonMobil has boosted its Permian Basin growth plans to produce more than 1mn barrels of oil equivalent (boe)/day by as early as 2024. This is an increase of nearly 80% and represents a "significant acceleration of value," it said March 5.
It has a resource base of about 10bn boe and is likely to grow further as analysis and development activities continue. Some years ago it bought another producer, XTO Energy, active in the region.
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“We’re increasingly confident about our Permian growth strategy due to our unique development plans,” said senior vice president Neil Chapman. “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 expects its investments to produce double-digit returns, even at low oil prices. At a $35/b oil price, for example, Permian production will have an average return of more than 10%, it said.
The anticipated increase in production will be supported by further evaluation of ExxonMobil’s Delaware Basin’s increased resource size, infrastructure development plans and secured capacity to transport oil and gas to ExxonMobil’s Gulf Coast refineries and petrochemical operations through the Wink-to-Webster, Permian Highway and Double E pipelines.
It is also planning an LNG export terminal at Golden Pass, Texas, on which it took final investment decision last month with Qatar Petroleum. The $10bn terminal will have capacity of 16mn mt/yr of LNG early next decade.
ExxonMobil has large, contiguous acreage that enables multi-well pads in large development corridors connecting to efficient gathering systems, reducing development costs and accelerating production growth. Its scale, financial capacity and technical capabilities enable the company to maximize the value of the resource, it said.
ExxonMobil is planning a slew of projects 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 1bn ft³/day of gas and enhanced water-handling capacity through 350 miles of already-constructed pipeline.
ExxonMobil has 48 drilling rigs now and plans to increase this to around 55 by the end of the year.
Increased use of technology, including enhanced subsurface characterization, subsurface modelling and advanced data analytics to support optimization and automation, will help the company reduce costs, improve its development plan and increase resource recovery, it said.