Chevron will invest some US$4 billion in 2018 to increase its crude oil output in the Permian, a senior Chevron manager said at a conference on Monday, in a sign that the U.S. supermajor will continue to bet big on the most prolific U.S. shale play.
"We will be investing roughly $4 billion, next year, of capital in the Permian Basin, and we plan to grow production over the next several years to well in excess of 400,000 bpd," Ryan Krogmeier, Chevron's vice president of crude supply and trading, said at the S&P Global Platts APPEC conference in Singapore, as quoted by Reuters.
"The Permian is the powerhouse [of U.S. oil production growth]", Krogmeier noted.
According to Reuters, Chevron expects total Permian output from all producers operating in the shale play to increase by 1.4 million bpd by 2020, from 2.4 million bpd now.
The Permian oil production will average 2.580 million bpd in September 2017, and will rise by another 55,000 bpd to 2.635 million bpd in October, the EIA said in its latest drilling productivity report.
As early as in April this year, Chevron's chief executive John Watson said that the U.S. supermajor would be betting big on the Permian. Chevron's production in the Permian was 90,000 net barrels of crude oil per day in 2016. Watson expects the company's output in the shale play to increase eight times over the next decade and reach 700,000 bpd.
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Unlike some other producers who have just recently rushed to secure holdings in the shale play, Chevron is not a newcomer to the Permian - the group and its legacy companies have held acreage in the area since the early 1920s. Chevron's acreage in the shale play amounts to 2 million net acres, of which 85 percent is free of royalties to landowners or have low royalties.
Chevron planned to spend around US$2.5 billion on shale and tight investments in 2017, the majority of which was slated for the Permian Basin, a 67-percent increase over last year. In the upstream investments for 2017, the funds for the Permian were second only to the US$3-billion investment in the expansion of the Tengiz field in Kazakhstan.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More
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