(Photo Credit: Wikimedia/Zorin09/CC BY 3.0)
On Monday, ExxonMobil unveiled its plans to invest more than $50 billion in the United States over the next five years due to tax reform. Yesterday, Exxon provided some details on one of its expansion projects.
Exxon said on Tuesday that it plans to triple production from its operations in the Permian Basin in West Texas and New Mexico to more than 600,000 barrels a day by 2025. The company plans to spend $2 billion to upgrade transportation infrastructure in the region:
ExxonMobil today announced that it plans to triple total daily production to more than 600,000 oil-equivalent barrels by 2025 from its operations in the Permian Basin in West Texas and New Mexico. Tight oil production from the Delaware and Midland basins will increase five-fold in the same period.
Recent changes in the U.S. corporate tax rate create an environment for increased future capital investments, including ExxonMobil’s plan to spend more than $2 billion on transportation infrastructure to support its Permian operations.
The $2 billion infrastructure upgrades will include technology improvements and improved transportation networks:
The oil giant also plans to spend $2 billion to expand infrastructure to bring oil and feedstocks to market. Bottlenecks have emerged as a concern in the Permian as drillers packed into the basin in recent years to take advantage of its low-cost production during a prolonged oil price slump.
U.S. shale drillers use advanced technology such as horizontal drilling and hydraulic fracturing to wring oil and gas from rock formations. Oil companies have driven down the cost of the process and can quickly start and shut production from shale wells, giving them flexibility when crude prices sink.
ExxonMobil Chairman and CEO Darren Woods wrote on Monday that the new competitive tax code, along with smart regulatory policies, was critical in the company’s decision to invest $50 billion into the United States. “These investments are underpinned by the unique strengths of our company and enhanced by the historic tax reform recently signed into law,” Woods said. “These are all possible because of the resource base developed by our industry along with sound tax and regulatory policies that create a pro-growth business climate here in the U.S.”
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