Texas Oil Production Could More than Double by 2025 and Surpass Saudi Arabia

ExxonMobil revised its Permian Basin (Texas and New Mexico) growth plans to produce more than 1 million oil-equivalent barrels per day by as early as 2024 – an increase of nearly 80 percent and a significant acceleration of value.

Exxon’s resource base in the Permian is approximately 10 billion oil-equivalent barrels and is likely to grow further as analysis and development activities continue. Exxon’s current Permian reserves would last about 30 years at the 1 million barrel per day rate.

ExxonMobil is actively building infrastructure to support volume growth. Plans include construction at 30 sites to enhance oil and gas processing, water handling and ensure takeaway capacity from the basin. Construction activities include central delivery facilities designed to handle up to 600,000 barrels of oil and 1 billion cubic feet of gas per day and enhanced water-handling capacity through 350 miles of already-constructed pipeline.

Exxon Mobil plans to reduce the cost of pumping oil in the Permian to about $15 a barrel which is a level only seen in the giant oil fields of Saudi Arabia.

The shale revolution has made the Permian into the world’s largest shale field. it is producing over 4 million barrels a day, which is more than the Saudi Arabia Ghawar oil field.

Chevron announced plans last week for 900,000 barrels a day by 2023. Royal Dutch Shell Pis looking for deals to bulk up its Permian operations.

If all of these plans come to fruition then Texas-New Mexico oil production from the Permian could surpass Saudi Arabia oil production by 2025. Saudi Arabia is currently producing at 9.8 million barrels per day.

SOURCES- Exxon, Rigzone

Written By Brian Wang

12 thoughts on “Texas Oil Production Could More than Double by 2025 and Surpass Saudi Arabia”

  1. “Surpass” Saudi when “Saudi”= Aramco. Ie geo borders versus global companies. no prob, just an observation as many fall into the geo borders mindset.

  2. Good! Hope it makes the middle east OBSOLETE! Anything that takes them down, is a good thing. That part of the world has been funding global terrorism for 50 years or more!

  3. correct. See the Anadarko deal today. It’s the problem with specialists versus integrated. There is a huge advantage if you own the feedstock and sit at all the major distribution points for the end product. Wouldn’t be surprised if Aramco makes a play for assets like Ineos.

  4. Interesting. That means integrated players like Exxon, Chevron… and now even Aramco… can keep drilling profitably in the U.S. into the $30s. That’s not good for virtually every other producer on earth.

  5. Yes, good answer. “Dutch disease” as it’s formally known.

    Large and wonderful comment deleted when this stupid buggy site reloaded because of overloading from too many ads. One more day of this and I’ll turn adblocking on for this site.

  6. It seems to have worked for a lot of other petro states. I think a big resource industry sucks capital and skills out of the rest of the economy – even in Australia, a few years back, the mining boom was pricing other employers out of hiring a lot of skilled tradies. Venezuela is a classic case of over-reliance on oil, but I’ve heard a similar explanation for the decline of the Spanish empire versus the Protestant countries of northern Europe. Spain was hauling so much bullion back from South America, there was no room for its own capital-producing industries. In modern times, places like Japan, Korea, Taiwan, and Singapore, with no natural resources to speak of, easily outgrew more well endowed states. Vague enough ?

  7. You can easily make money at $30/bbl in Texas if you also own the refinery and downstream and happen to own the petrochemical space. People focus way too much on upstream cost when the real play is much further down the value chain. Companies who only drill versus companies who drill, distill, make fertilizers and sell plastics and fuels.

  8. The writer seems to not get it. Aramco has a strategic imperative to grow upstream outside of the Kingdom, and already owns and operates the largest refinery in the U.S. Aramco is converting itself into an IOC like Exxon/Chevron/Shell etc. Aramco is also spending about $100billion on non-saudi gas assets, and of course petrochem. Pretty simple idea. As an IOC, Aramco doesn’t have to worry about the old OPEC, and the new OPEC is the U.S. Think Exxon Mobil on massive steroids.

    The world is no longer Saudi vs Permian/U.S. It is Aramco globally versus everyone else. Heck, they are already one of the largest employers in Texas.

  9. The real variable here, IMO, is production cost. So far shale producers have proven most of the “haters” (myself included, I’ll admit when I was wrong) wrong by continuing to grow output and lower cost. Going from $90/bbl down to $45/bbl… quite a feat. Can the cost of production fall to $40/bbl? $35/bbl? I don’t know and I sort of doubt it but if production costs did fall that much and output rose along with the projections given here it would be problematic (to say the least) for many of the traditional global oil producers.

    Take a producer like the KSA. Their actual cost of production (the cost of drilling a well, completing it, associated infrastructure, operating it…) is quite low per barrel. Probably in the ~$10/bbl range. However, when you include the “social costs” of oil production (basically the need to fund the government) that cost soars to $80/bbl+. So if the KSA determines they can’t reduce their social expenditures by default they have to reduce their investment in future production which means future production will fall which creates a vicious feedback loop.

    …North Sea producers are probably screwed.

  10. I’m waiting on the usual suspects to leap in with vague explanations as to why becoming the dominant oil producer will result in the USA collapsing into bankruptcy and chaos.

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