Chevron CFO Pierre Breber said last week the company’s capital budget this year is $14 billion – 65 percent below its peak in 2014 – and it could take until the second half of 2021 or early 2022 before Chevron increases spending on new drilling in Permian Basin. “We have paused in the Permian because the world doesn’t need more barrels, and we didn’t want to spend more capital to add barrels into an oversupplied market,” Breber told Bloomberg Jan. 29. “We need to get control over the pandemic and be on a pathway to a sustained economic recovery.”
San Ramon, Calif.-based Chevron earlier made its Permian assets the cornerstone of growth plans to more than double production to 1 million barrels of oil per day by the mid-2020s. But the global pandemic, reduced demand and declining oil prices forced Chevron and others to amend their plans.
Diamondback Energy CEO Travis Stice also talked last week of oversupply. “We are still 8 million barrels of oil oversupplied,” Stice told Midland Reporter Telegram after a conference on oil and gas issues with Gov. Greg Abbott, Clint Walker of Cudd Energy Services and others. “It’s incumbent on oil producers to be aware this is an oversupplied world, and we don’t need to grow volumes.”