04/03/2022 by Richard
Despite many US operators focusing more on shareholder returns than growing output, the number of oil-drilling rigs has risen by 348 from a cyclical low according to data from Baker Hughes, which provides oilfield services. This reflects an average weekly increase in the rig count of 4.4.
The rise is slower than in the previous shale booms of 2009 and 2016, when rig counts rose on average by 7.4 and 5.5 per week, respectively, reflecting a continuing degree of caution among some shale operators. According to data from the US Energy Information Administration, this was reflected in an annual increase in oil production of 630,000 barrels per day (bpd) at the end of last year, with it predicting a similar increase at the end of this year.
ExxonMobil, the producer of Mobil lubricant products, recently indicated that it planned to increase its production in the US Permian Basin by 25% this year. Darren Woods, its Chief Executive Officer, recently said on an earnings call to analysts:
“Our expectation as we go into 2022 is to grow another 25%, and that’s doing that with a very tight control on capital.”
Woods also said that new technology being employed in the Permian Basin allowed its assets there to produce oil at a cost that is very low. According to Woods, this, combined with oil from the company’s discoveries in Guyana, will allow its global production to break even at an oil price of around $41 per barrel, with plans to get this down to $35 in the coming years.
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