Major Companies to Boost U.S. Shale Oil Boom
As major companies like Exxon Mobil (XOM) and Chevron (CVX) turn their attention and resources toward the Permian Basin in Texas, the U.S. shale oil boom is likely to continue its growth.
Oil giants are increasingly seeing the value in investing in production in the Permian Basin and this investment should have some significant outcomes. For one, the additional involvement will likely serve as a buffer to crude oil price swings, providing a less volatile supply and keeping the price of gas contained. The second impact that this investment will have is the increase in the U.S. oil production which will allow it to consistently be a net oil exporter.
Several big names are stepping up their game in Texas. Chevron, for one, has doubled both its rig count in the Permian region and its production in the last two years. Their 2019 budget shows them looking to increase their spending in the Basin 9%, bringing it to a $3.6 billion total.
Exxon Chairman and CEO Darren Woods indicated the company’s commitment to continue its investment in the region, saying Exxon will “continue to expand and accelerate activities” there. The company is reportedly revealing its long-term strategy in March.
One of the major factors that could help to fuel the increase in oil production is the completion of several new oil pipelines. The increased capacity of possibly 2 million barrels per day will allow companies to further feed their refineries. The increased ability to easily move oil from the Permian Basin to the Gulf Coast in addition to companies’ continued commitment to finding cheaper ways to pump oil should help to push break-even prices lower and encourage further involvement in the region.
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