The Permian Basin Continues To Drive Record U.S. Energy Growth
Despite recent low crude prices and a significant drop in the DrillingInfo rig count during January, the giant Permian Basin of West Texas and Southeast New Mexico continues to expand its role as the main driver of energy growth in North America. In just the past week, we have seen the following significant events that are attributable all or in part to what has become the world’s second most-productive oil and gas resource:
A driver of upstream and midstream profits – Both ExxonMobil and Chevron beat analyst expectations with their 4th quarter earnings announcements, driven mostly by their upstream and midstream developments in the Permian. Exxon beat forecasts by almost one-third, with its full-year 2018 earnings coming in at the highest level since 2014. Driven by its Permian drilling, Chevron’s oil and natural gas production rose to an all-time high as the company produced a record 3 million barrels of oil per day (bopd) during the 4th quarter.
A driver of downstream expansion and acquisitions – Early last week, Exxon also broke ground on a major expansion of its Beaumont refinery, a project that will add the capability of processing an additional 250,000 bopd and make it the largest refinery in the country. The new refining train being installed will be fit for processing the light, sweet crude produced in the Permian Basin and other North American shale plays, a growing volume of which must currently be exported in order to be refined. Meanwhile, Chevron confirmed on February 1 that it was acquiring the interest in the Pasadena Refining System owned by Petrobras America Inc. This purchase gives Chevron an additional 110,000 bopd of capacity to refine its own light sweet crude.
A driver of record domestic production…
