Posted on Leave a comment

Chevron further raises Permian production target

US-based oil major Chevron has announced that it is raising its targeted daily production in the Permian Basin to 725,000 barrels per day (bpd) of crude oil, a 15% increase on last year, compared to the 10% increase that had previously been announced. The Permian Basin makes up a significant proportion of total US crude oil production at about five million bpd.

Continental Resources Inc., Matador Resources Co. and Hess Corp. have also recently signalled they will increase their shale production in the US. Chevron, which also markets lubricant products under the Texaco brand in the UK, appears to have faced rising costs in the Permian Basin, however. Pierre Breber, its Chief Financial Officer, said in an interview recently that:

“We are seeing some cost increases in the Permian but it’s very manageable.”

Breber added that the company was now back on the track it was before the COVID-19 pandemic in terms of its production in the US’s biggest shale oil field, pointing out that this has happened in response to demand:

“There is a supply response happening. It’s just lagging what’s been very strong demand.”

With Brent Crude trading fairly consistently above $100 per barrel since Russia invaded Ukraine and triggered a raft of sanctions, including against Russian energy products, US President Joe Biden has requested that US oil firms increase their domestic production. The response by Chevron and other smaller firms suggests that they are amenable to this, but their progress may be hampered by shortages of equipment and labour.

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.