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- U.S. shale producers, including ExxonMobil, are prioritizing financial stability and shareholder returns over aggressive drilling expansion despite political encouragement.
- President-elect Trump’s pro-energy agenda contrasts with the industry’s current focus on disciplined growth and resilience to oil price volatility.
- Shale companies have achieved efficiency gains and prefer quality asset management to ensure sustainable profits rather than rapid production growth.
U.S. oil and gas supermajor Exxon does not expect American producers to gear up in a “drill, baby, drill” mode once Donald Trump becomes U.S. President, as companies will maintain the spending discipline of the past few years.
“We’re not going to see anybody in ‘drill, baby, drill’ mode,” ExxonMobil Upstream President Liam Mallon said at the Energy Intelligence Forum conference in London, as carried by Reuters.
“A radical change (in production) is unlikely because the vast majority, if not everybody, is focused on the economics of what they’re doing,” Mallon added.
Producers will maintain discipline and drive quality assets, which will limit growth rates, according to the executive.
Incoming President Trump is expected to prioritize oil and gas from day one, in an energy package to expand domestic oil and gas drilling on federal lands and offshore lease sales, and to accelerate LNG export permits.
President-elect Trump has vowed on the campaign trail to support the oil, gas, and coal industries and repeal some of President Biden’s environmental-oriented measures, including a pause on new LNG permitting and the minimum possible offshore oil and gas lease sales mandated by Congress.
Although President-elect Trump is chanting “drill, baby, drill,” the priorities of the U.S. oil industry have drastically changed since Trump’s first term.
Trump will encounter a very different mindset from shale industry executives in 2025 compared to the late 2010s when he was last president.
The U.S. shale patch is drilling, but it is drilling because it wants to distribute more of the profits to shareholders. It has made huge progress in capital discipline and efficiency gains and is getting more bang for its buck. Priorities are now returns to investors and financial frames capable of withstanding oil price volatility.
Chevron, for example, sees its capex in the Permian probably peaking this year. Chief executive Mike Wirth told the Q3 earnings call, just a few days before the U.S. presidential election, that “I think what you’ll see is this year is probably going to be the peak in Permian CapEx.”
By Charles Kennedy for Oilprice.com
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The post Exxon: Don’t Expect ‘Drill, Baby, Drill’ Under Trump appeared first on Energy News Beat.
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