• ‘Big oil’ increasingly becoming ‘big shale’

    Date posted:

    • Post Author

      Patrick Lavery

      Combustion Industry News Editor

Some of the world’s ‘big oil’ companies are increasingly becoming ‘big shale’ companies, as David Sheppard from The Financial Times has argued. Both ExxonMobil and Chevron have raised their expectations of oil production over the next five years from the Permian Basin, which spans across Texas and New Mexico and is the centre of US shale oil and gas production. By 2024, the two companies together expect to be producing 2 million barrels of oil per day from the area, 60% higher than previous forecasts. Currently, the total output from all companies working in the Permian is around 4 million barrels per day, and the FT points out that if the area was a member of Opec, it would be the third-largest producer of the cartel. The big oil companies are increasingly investing in unconventional oil and gas production (as evidenced by BP last year buying BHP’s shale business), and ‘unconventional’ production is now responsible for around two-thirds of total US oil production and around 80% of gas, making it rather conventional indeed. With shale oil production expanding in the future, and existing conventional oil production possibly reducing, the transition for the ‘big oil’ companies will continue, which spells trouble for international competitors that may not be able to produce as profitably.