US oil major ExxonMobil is planning to increase the output of its operations in the Permian Basin, despite taking a third out of its capital expenditure in the wake of the COVID-19 pandemic.
The company says it has restored most of the production that it cut when oil prices crashed earlier in the year. It says only 140,000 barrels per day (bpd) of government mandated cuts remain to be reversed, but it did not say which locations were affected.
ExxonMobil, like most oil companies, is currently pursuing cost-cutting measures, with it planning to scale its global workforce down by 15% and cut capital spending from $33 billion to $22 billion. It has also improved the efficiency of its Permian operations, with drilling and completion costs down by over 20%, as well as marked improvements in fracturing-stages-per-day and lateral-feet-per-day drilling rates.
Senior Vice President Jack Williams said the oil major’s highly integrated refineries, many of which produce the raw materials for Mobil lubricant products, would fare better in future:
“Those are the refineries [that] are going to be competitive and long term that belong in the portfolio. So we’re making that call between ones we’re going to invest. The ones that are already there in our highly integrated refineries in the Gulf Coast, Baytown, Baton Rouge and increasingly, Beaumont.”
Executives at the company also expressed confidence that economic recovery will lead to a bounce back in the world’s energy demand. They also expect prices to rise once the current low levels of investment manifest in a tightening of supply.