How Supermajors Are Transforming The Permian

The Permian Basin was once a hotbed of small, independent prospectors, wide-eyed wildcatters, and small companies hoping to strike it rich. Now, it is brimming with supermajors clamoring to buy out the region’s smaller operators and pump out the basin’s vast reserves of crude with the kind of breakneck efficiency that only massive corporate backing can achieve. Ten years ago, in 2008, United States oil production bottomed out at about 3.8 million barrels a day. Today, 3.8 million barrels are produced in a day in the Permian Basin alone. For a bit of perspective, the entire state of California, which recently beat out the United Kingdom as the fifth biggest economy in the world, has around 10 active drilling rigs. The Permian Basin alone has nearly 500. Exxon Mobil and Chevron, the United States’ top energy moguls, have both made the Permian Basin their focus, prioritizing their investments in West Texas over all their other projects worldwide, while European supermajors including Royal Dutch Shell and BP are also working diligently on growing their presence in the Permian. As of last year, Exxon Mobil, based in Irving, Texas, became the most active driller in the Permian basin with 38 drilling rigs running in the region that extends from West Texas to southeastern New Mexico. The Midland, Texas-based Concho Resources (previously the most active driller in the Permian before being surpassed by Exxon Mobil) comes in second with 34 rigs. Concho Resources significantly expanded their presence in the Permian Basin last year when they acquired competing company RSP Permian for $8 billion. San Ramon, California-based Chevron takes third place in regional drilling activity with more than 20 rigs in the Permian. Chevron has recently begun ramping up the development of their holdings, and now says that their Permian Basin production spiked a whopping 80 percent in less than a year, up to its current level of about 340,000 barrels of oil equivalent per day. Displaying a similar bravado, Exxon Mobil has said it plans to produce more than 600,000 barrels a day in the Permian Basin by the year 2025...MORE