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US oil production to stay below pre-pandemic levels

Vicki Hollub, the CEO of the international energy company Occidental, has said that she doesn’t expect US oil production to return to the same level it was before the pandemic.

In a talk with Brian Sullivan on CNBC Evolve, she said:

“I do believe that most companies have committed to value growth, rather than production growth. And so I do believe that that’s going to be part of the reason that oil production in the United States does not get back to 13 million barrels a day.”

This seems to be supported by the actions of oil companies like ExxonMobil and BP, the latter of which also makes Castrol industrial lubricant products. Both companies have announced their intentions to focus oil production on the most lucrative assets. For example, ExxonMobil recently announced that the vast majority of its investment will generate a 10% return, even with oil prices as low as $35 per barrel.

Hollub also said Occidental was investing heavily in carbon capture to achieve net-zero oil production, pointing out that it was emissions that were the problem rather than oil in itself, and the narrative needed to be shifted to reflect this.

Occidental plans to build the world’s first industrial-scale direct air capture (DAC) facility, which will remove about a million tons of carbon dioxide – equivalent to the emissions of more than 200,000 cars – directly from the atmosphere. The extracted carbon dioxide will then be pumped permanently into oil fields to help speed up oil production.

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