ConocoPhillips (COP.N), the world’s largest independent oil producer, sees shale production growing 25 per cent next year even as crude prices tumble, proving the industry’s resilience in volatile markets, said Chief Executive Officer Ryan Lance.
In the U.S., Conoco wells in the Eagle Ford Shale, Permian Basin and the Bakken field generate cash when prices hover around US$50 a barrel, Lance said in an interview on Monday in Houston. Conoco pumped 313,000 barrels a day from the three regions combined during the third quarter, or 25 per cent of the Houston-based company’s global production.
American crude output is surging, contributing to a global supply glut that has pushed prices down by third since the beginning of October. The subsequent squeeze on shale profits may slow growth next year but the industry is in far better shape that it was at the advent of the last slump four years ago, Lance said.
Production growth “slows down at US$50 but I don’t think it stops at US$50 and it certainly continues if prices get back to US$60,” Lance said. Skeptics thought shale “wouldn’t last long but it’s here, it’s a huge resource and it’s going to be resilient and long lasting.”