26 September 2017, Sweetcrude, Lagos – Chevron will invest $4 billion in shale oil in 2018, Ryan Krogmeier, Chevron’s vice president of crude supply and trading, has said.
In a statement on Monday, Krogmeier said the company will “be investing roughly $4 billion, next year, of capital in the Permian Basin”, and plans to grow production over the next several years to well in excess of 400,000 bpd.
“The Permian is the powerhouse [of U.S. oil production growth]”, Krogmeier noted.
Krogmeier said Chevron expects total Permian output from all producers operating in shale to increase by 1.4 million bpd by 2020, from the current 2.4 million bpd.
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 Energy International Agency, EIA said in its latest drilling productivity report.
In April this year, Chevron’s chief executive John Watson had hinted that the company would be investing hugely in the Permian.
Chevron’s production in the Permian was 90,000 net barrels of crude oil per day in 2016.
However, Watson expects the company’s output in the shale play to increase eight times over the next decade and reach 700,000 bpd.
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 $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.
Report written with additional information from Reuters and OilPrice.