HOUSTON: Top US oil producer ExxonMobil's planned acquisition of the No. 1 Permian shale producer Pioneer Natural Resources could further restrain out...
ExxonMobil and Pioneer Natural Resources logos are seen in this illustration taken, October 8, 2023. REUTERS/Dado Ruvic/IllustrationTop US oil producer ExxonMobil's planned acquisition of the No. 1 Permian shale producer Pioneer Natural Resources could further restrain output growth in the largest US oilfield, squeezing pipeline companies and suppliers, executives and energy advisors said.
“With this Pioneer deal, there is a possibility that Exxon might say they’ve achieved that growth target for Permian production and so they don’t have to grow as rapidly as they originally intended,” says Ajay Bakshani, director of analytics at research firm East Daley Analytics. Overall, oil companies have cut 36 active drilling rigs in the Permian in the last year, a 10% drop. Rigs are an indicator of future output.
“There’s no question the position of that magnitude or size would give them considerable leverage in negotiating or contracts with the service providers,” said Ben Crook, a portfolio manager at Hennessy Energy Transition Fund. The White House would struggle to thwart the acquisition, antitrust lawyers and experts said last week.