Exxon Mobil Corporation (NYSE:XOM) and Chevron Corporation (NYSE:CVX), already significant players in the Permian Basin, are preparing for a substantial boost in production in 2024.

This development suggests that U.S. oil production might exceed earlier expectations, mirroring the trend observed in 2023.

ExxonMobil’s Growth through Acquisition

ExxonMobil has entered into an agreement to acquire Pioneer Natural Resources Company (NYSE:PXD) for $64.5 billion, marking a noteworthy expansion in the Permian Basin. This acquisition is poised to significantly enhance XOM’s production capabilities.

In the fourth quarter, ExxonMobil reported an impressive production of 610,000 barrels of oil equivalent per day (boe/d), slightly surpassing its 2023 guidance by 1.6%. The company aims to elevate its Permian volumes to 650,000 boe/d in 2024, with a long-term target of 1 million boe/d by 2027.

Following the Pioneer acquisition, ExxonMobil’s Permian volumes are projected to surge to 1.3 million boe/d, ultimately aiming for an impressive 2 million boe/d.

Chevron’s Record Production and Ambitions

CVX achieved a record in the fourth quarter with an average production of 867,000 boe/d. This California-based giant is actively pursuing its expansion plans. Chevron has commenced the year with 12 rigs and three frac crews in the Permian, intending to boost production by 75,000 boe/d this year.

The objective is to conclude 2024 with an average production of 900,000 boe/d and to reach the 1 million boe/d milestone in 2025.

Environmental Concerns Amidst Expansion

The ambitious expansion efforts by ExxonMobil and Chevron have not been without criticism. Environmentalists and some investors have voiced concerns, emphasizing the urgent need to reduce emissions to mitigate the severe impacts of climate change. Despite these pressures, the companies are navigating the challenge of increasing cash flow through heightened oil production, while avoiding an oversupply that could depress prices.

Conclusion

The outlined plans by ExxonMobil and Chevron signal significant growth in U.S. oil production, primarily driven by increased activities in the Permian Basin. While this may bring financial benefits to the companies, it raises pertinent questions about the delicate balance between economic growth and environmental responsibilities, especially in the context of global climate change challenges. As 2024 unfolds, the industry will closely monitor these developments, alongside the ongoing discourse about sustainable energy practices.

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