According to the CEO of Occidental Petroleum Corp, US oil production is unlikely to return to the record levels seen before the COVID-19 pandemic, but production will be restored.
Speaking at the Energy Intelligence Forum, Vicki Hollub said:
“It’s just going to be too difficult to replace the 2 million barrels a day of production that we’ve lost, and then to further grow beyond that. Over the next three to four years there’s going to be moderate restoration of production, but not at high growth.”
Occidental, along with oil major Chevron, which owns the Texaco lubricant brand, is one of the largest oil and gas producers in the prolific Permian Basin of Texas and New Mexico. That and other shale areas have seen a rapid expansion in production as operators became more adept at economically developing plays. This culminated in the US becoming the world’s largest oil producer, with an output of around 13 million barrels per day of oil.
The oil producer has had to reign in its capital spending and cut dividends in the face of the pandemic and the resulting drop in demand for oil and fuels, especially given that it took on debt to acquire competitor Anadarko Petroleum Corp for $37 billion last year. This has inevitably led to Occidental and other shale companies cutting growth forecasts as they focus more on investors’ returns.
While it will take time to restore production, it should be noted that even now, the US still remains a major oil producer.