WTI prices have dipped well below $50 a barrel, a level at which many of the independent operators in the Permian are thought to be losing money
Houston — ExxonMobil is slowing the pace of its flagship development in the Permian Basin, one of the first signs that the oil majors are throttling back on production in response to the recent slump in prices.
The US energy giant said on Thursday in a slide presentation it would operate at a “reduced pace” in 2020 and 2021 compared with its prior outlook. The company sees output from the basin in West Texas and New Mexico at about 360,000 barrels of oil equivalent in 2020, rising to more than one-million in 2024.
Oil prices have slumped in recent weeks as concern mounts over the effect of the coronavirus on demand. Goldman Sachs said earlier this week that demand would contract in 2020 for only the fourth time in 40 years. West Texas Intermediate crude prices have dipped well below $50 a barrel, a level at which many of the independent operators in the Permian are thought to be losing money.
“The company emphasised it is evaluating the pace of near-term development activities in response to market conditions, and can do so while preserving value,” Exxon said in a separate statement, referring to the Permian. Exxon, along with Chevron, is making a large bet on the Permian as a source for future production growth.
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