ExxonMobil Ups Permian Output Target to 1 Million Barrels per Day by 2024
ExxonMobil said Tuesday it has revised its Permian Basin growth plans to produce more than 1 million BOE/d by as early as 2024 – an increase that is driving significant pipeline and infrastructure development.
The Irving, Texas-based oil giant’s new target represents a significant boost in size and speed over plans set only a year ago, when it announced a goal of tripling total daily Permian production to more than 600,000 BOE/d by 2025.
Exxon then said it would support its increased production by investing more than $2 billion in terminal and transportation expansion, including pipeline construction from the Permian Basin to the Gulf Coast. The company formed a joint venture with Plains All American Pipeline last year to build a 1 MMbd pipeline to refineries in Baytown and, this January, said it would nearly double the capacity of its 365,000 bpd Beaumont refinery.
“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.”
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.
Exxon said its anticipated increase in production will be supported by further evaluation of its 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.
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 said.
Exxon’s investments in the Permian Basin are expected to produce double-digit returns, it said, even at low oil prices. At a $35 per barrel oil price, for example, Permian production will have an average return of more than 10 percent, the company said.
“Our plans are attractive at a range of prices and we expect them to drive more value as we continue to lower our development and production costs,” Chapman said.
ExxonMobil remains one of the most active operators in the Permian Basin and has 48 drilling rigs currently in operation and plans to increase its rig count to approximately 55 by the end of the year.
Increased use of technology, including enhanced subsurface characterization, subsurface modeling and advanced data analytics to support optimization and automation, will help the company reduce costs, improve its development plan and increase resource recovery, Exxon said. – P&GJ