America’s big companies Chevron Corporation (NYSE:CVX) and Exxon Mobil Corporation (NYSE:XOM) have continued ramp up oil production in the Permian Basin. The big companies continue to dominate the small companies in the basin that must deal with declining drilling, muted oil prices and lack of investment.
Increased Oil production in Permian Basin
Currently Exxon Mobil is leading in production in the Permian Basin with over 50 rigs that operate in the West Texas oil field. In the last 12 months the company has increased its production by close to 90%. On the other hand Chevron which is the best global oil producer per quarter saw its production in the Permian Basin increase too around 420,000 barrels per day which an increase by almost half of what the company reported in Q2 last year.
The companies reported an increase in output in the second quarter and have indicated that they are planning to increase their investment in the Permian Basin which is currently the leading shale oil and gas producer. The basin has a daily production capacity around 4.2 million barrels of crude oil which is more than 30% of the country’s daily record production capacity of over 12 million barrels.
Shale oil drilling pioneer companies playing catch-up
Despite being late comers to the Permian Basin Chevron and Exxon Are already made a mark in a region that was mostly preferred by independent explorers and wildcatters. They are bettering small sized oil companies that are pioneers of the shale revolution that advanced the hydraulic fracturing and horizontal drilling techniques. The two companies have used their monetary prowess, diversified income and size to continue expanding their operations in the basin as well as drive growth.
The small and midsized oil exploration and production firms are facing growing pressure from investors to reduce spending and bring returns. For most of these firms it means selling some of their assets as well as slowing down which will leave them lagging behind in terms of growth as the big companies pursue their ambitions plans.