ExxonMobil outlined a new plan to ratchet up oil production in the shale basin, indicating the energy company believes American oil production could help it boost sagging financials.
The company plans to spend nearly $5.5 billion drilling in Texas, New Mexico and North Dakota. Exxon is hoping to take advantage of technological advancements and lower costs of doing business in the shale.
It is increasing its investments to more than $22 million a year, even as most of other oil companies’ investments have flattened out.
“Our job is to compete and succeed in any market, irrespective of conditions or price,” new CEO Darren Woods said at Exxon’s analyst meeting in New York. He took over for Rex Tillerson, who stepped away after becoming President Donald Trump’s secretary of state.
The “ultimate prize” in the Texas and North Dakota basin is “significant,” he said, adding that the land the company controls in the oil region may hold the equivalent of as much as six billion barrels of oil and natural gas.
The multi-billion dollar Dakota Access Pipeline is also about to come online. The line is expected to shuttle 500,000 barrels of oil from the Dakotas to Illinois.
Activists are continuing their crusade against the company over allegations it supposedly hid knowledge about climate change from investors.
Various Democratic attorneys general argued the oil company lied to shareholders, media, and the public about the risks global warming posed to Exxon’s financial dealings. The crusade is partially the result of a September investigation of Exxon conducted by InsideClimate News (ICN).
ICN also reported that Amoco, Phillips, Texaco, Shell, and others joined Exxon in misleading the public about the supposed effects global warming has on sea levels.
The recent crash in oil prices has exposed weaknesses in a record of stable profits and returns that was once unimpeachable. Net income last year was $7.8 billion, the lowest since 1996, before Exxon bought rival Mobil Corp. for $82 billion in 1999.
Oil prices have rebounded recently after historically high production levels over the past 10 years.
A dramatic uptick in U.S. production has contributed to a global collapse in the price of oil. The price of a barrel of oil has plummeted from $104.95 in 2014 to $45.24 per barrel two years later. The average oil price over that two-year period is $43 per barrel.
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