Forced Frenemies, Exxon and Chevron take divergent paths as the leaders of the Permian in full swing

While the western production leader in Texas, Exxon, aims to increase its volumes by 50% over the next five years and continue to grow beyond 2030, Chevron adopts a “plateau” approach and focuses on available cash flows.

The two companies declared their profits on August 1 only two weeks after being forced to the contribution to become partners when a decision of a controversial arbitration fight in favor of Chevron allowed the company to close its acquisition of $ 53 billion in Hess and its largest participation at 30% in the century of Exxon.

However, for the two companies, the permien is their main basis for oil and gas volumes. In fact, the permien represents almost half of the country’s record summit 13.4 million barrels per day of crude oil. Exxon said it had increased its volumes to 1.6 million barrels of oil equivalent per day, including natural gas, while Chevron reached its 2025 objective of 1 million barrels per day during the second quarter.

Chevron aims to maintain its permanent release relatively stable in the future.

“We are very happy to have such an important shale portfolio and, at some point, growth is less the objective than the available cash flows, and we are approaching this point,” said the president and chief executive officer of Chevron, Mike Wirth in a call for results.

On the other hand, Exxon aims to reach a huge 2.3 million barrels per day in the permian by 2030. Exxon’s president and director of Exxon, Darren Woods, said that he was “absolutely” in disagreement with the idea of “peak” the production of oil production in the midst of prices and a basin at maturity. Exxon is also found in an enviable position after its acquisition of $ 60 billion last year of the natural resources of the leader of the permien.

“We are a long -term striker. Everyone in the unconventional (shale) space plays short game,” said Woods, citing the scale and technological advantages that lead to a much greater cost saving, allowing more value -oriented growth. “It led us to have growing confidence, the projection that we have after 2030 is a vector ascending and will continue to grow.”

Woods said Exxon is even open to more acquisitions in the future – but not growth for growth reasons. Any agreement must prove that “one plus one is equal to three”.

“It is, in my mind, the magic of successful acquisitions and what we are looking for,” said Woods.

Exxon and Chevron both delivered quarterly beats, but their profits are declining in a lower oil price environment. Exxon’s quarterly net profit of $ 7.1 billion dropped by 23% from one year to the next against $ 9.2 billion. Net income of $ 2.5 billion from Chevron dropped by 43% from one year to the next against $ 4.4 billion.

A long -awaited decision

In Guyana, the long -awaited decision of an arbitration panel supervised by the International Chamber of Commerce decided on July 18 that the acquisition by Chevron de Hess did not violate the right of Exxon of first refusal for the participation of Hess, because it bought the whole company and not only the position of Guyana.

Although most of the industry observers expected Chevron to prevail, Woods said on August 1 that the decision was a “surprise”.

“We were very confident in our position,” said Woods. “After having co-written the contract, we understood its intention and believe that contractual language transmitted it. Unfortunately, the court interpreted him differently. Although disappointed, we respect the process and decision. ”

Woods said that Guyana’s shared production volumes are expected to reach at least 1.3 million barrels of oil equivalent by 2030.

For Chevron, the acquisition of Hess and Guyana helps to compensate for the results of global exploration of “disappointing” oil and gas in recent years. The company was based on volumes in the United States, cost reductions and international developments with a long-term cycle, Wirth said.

Exploration will develop in the future, he said. “But overall, our MO (Modus Operandi) or our reputation for capital discipline will remain.”