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ExxonMobil and Chevron lag Permian independent production despite claims of leadership

November 26/2021

MOSCOW (MRC) -- Although the Permian Basin is an important upstream growth target for Chevron and ExxonMobil, independent operators are the dominant producers in the area, according to an analysis by the Institute for Energy Economics and Financial Analysis (IEEFA).

While ExxonMobil and Chevron have portrayed themselves as leaders in the Permian, the IEEFA analysis finds it unlikely that future operations from their current assets will propel either to top-producer status in the vast region that sprawls across Texas and New Mexico.

Both Chevron and ExxonMobil see the Permian as the future of their domestic upstream growth, said Trey Cowan, an IEEFA oil and gas analyst who authored the briefing note. But the reality is that they are not likely to overtake independent producers at their current pace.

IEEFAs analysis of data from 2018 through 2020 found independent producers hold the highest-performing wells, and that metrics used by the two supermajors to portray leadership actually favor independent producers. For example, Pioneer Natural Resources, which acquired Parsley Energy and DoublePoint Energy earlier this year, overtook OXY to become the largest Permian Basin producer.

Big Oil would have to significantly increase their drilling and completion campaigns to rise to the activity pace that the leading independents have set, said Cowan. Their average productivity per well also lags far behind EOGs in the Delaware Basin.

With thousands of turned-in-line wells, the Permian has become the focus of US oil production. Output has increased from 890,000 barrels per day (bpd) to 4.3 million bpd over the last decade, or more than twice the pace of total US crude oil production growth over the same period, according to the Energy Information Administration.

While Big Oil has held substantial acreage positions across the Delaware, Midland and Central Basin Platform in the Permian, we find little by way of well production quality to distinguish the supermajors, said Cowan.

As MRC reported before, ExxonMobil said earlier this month it is on track to meet its 2025 emissions reduction targets by the end of this year - four years earlier than planned - and has vowed to ramp up investments to further cut emissions.

We remind that ExxonMobil plans to build its first, large-scale plastic waste advanced recycling facility in Baytown, Texas, and is expected to start operations by year-end 2022. By recycling plastic waste back into raw materials that can be used to make plastic and other valuable products, the technology could help address the challenge of plastic waste in the environment. A smaller, temporary facility, is already operational and producing commercial volumes of certified circular polymers that will be marketed by the end of this year to meet growing demand.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,868,160 tonnes in the first nine months of 2021, up by 18% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,138,510 tonnes in January-September 2021, up by 30% year on year. Supply of propylene homopolymer (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding statistical copolymers of propylene (PP random copolymers) decreased significantly.

ExxonMobil is the largest non-government owned company in the energy industry and produces about 3% of the world"s oil and about 2% of the world"s energy.

Headquartered in San Ramon, California, Chevron Corporation is the the second-largest integrated energy company in the United States and among the largest corporations in the world. Chevron is involved in upstream activities including exploration and production, downstream activities including refining, marketing and transportation, and advanced energy technology. Chevron is also invested in power generation and gasification processes.
Author:Margaret Volkova
Tags:PP, PE, crude and gaz condensate, propylene, ethylene, petrochemistry, recikling, Chevron, Exxon Mobil, USA.
Category:General News
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