Exxon and Chevron Plot Permian Cuts With Shale Spending Axed

(Bloomberg) -- Exxon Mobil Corp. and Chevron Corp. are curbing production in the Permian Basin as shale spending bears the brunt of budget cuts spurred by a crash in crude prices.

Irving, Texas-based Exxon expects to shut in about 100,000 barrels of oil equivalent a day in the West Texas and New Mexico oil field in the second quarter. Chevron is chopping 125,000 barrels a day from its targeted exit rate for the basin this year. It will drop to just 5 rigs, Chief Executive Officer Mike Wirth said in a Bloomberg TV interview Friday.

The Permian Basin has been a growth engine for the U.S. oil giants in recent years, but as a pandemic-fueled plunge in crude prices forces spending cuts, shale investment has been among the first to go.

Even independent Permian producers, criticized for growing output at all costs, are dramatically altering their plans. Concho Resources Inc. expects to keep production flat this year while warning that it may be forced to curtail some output. The West Texas-based shale explorer has already voluntarily shut in some production.

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