As the demand for oil and natural gas in the U.S. is expected to grow before 2020, ConocoPhillips plans to maintain a diverse and balanced operating portfolio around the globe, the Houston-based exploration and production company's chairman and CEO, Ryan Lance, said June 11.
Speaking during a podcast hosted by the Columbia University/SIPA Center on Global Energy Policy, Lance said that while the company enjoys a solid position in the prolific Permian Basin, it is focusing on other U.S. shale formations and Alaska in terms of growth.
"[The Permian] is going to be a huge resource and an important basin for decades to come, but it is quite expensive to do business [there] today," Lance said, pointing to inflationary forces and export constraints within the region.
The company recently hiked its estimates for its full-year production due to higher-than-expected output from the Delaware Basin in the Permian and from two other shale formations.
Excluding Libya, ConocoPhillips' overall first-quarter production was 1.22 million barrels of oil equivalent per day, down 0.36 MMboe/d year on year. However, in the Lower 48, combined production in the Eagle Ford Shale, Bakken Shale and Delaware Basin grew 20% year on year.
The company's production in the first quarter hit 163,000 boe/d in the Eagle Ford, while output from the Bakken and Delaware reached 68,000 boe/d and 19,000 boe/d, respectively.
ConocoPhillips now expects that full-year production from the Lower 48 will likely exceed its prior forecast of output from the three plays growing 22% year over year to average 250,000 boe/d this year.
In the U.S., Lance also pointed to the company's position in Alaska. ConocoPhillips recently completed the acquisition of 22% lease interests in the Western North Slope of Alaska from Anadarko Petroleum Corp. for $400 million.
With that deal closing, ConocoPhillips holds a 100% stake in about 1.2 million acres of exploration and development lands, including the Willow oil discovery in the northeastern part of the National Petroleum Reserve in Alaska. The lease interests posted production of 11,000 boe/d in the first quarter.
Lance said the LNG market is oversupplied, and new investments will be needed as demand continues to grow rapidly.
"We see that demand catching up with that oversupply and eliminating that differential sometime in the next decade. So, there will be more investment needed in the greenfield LNG projects both here in the U.S. and around the world in order to meet that growing demand over time," he said.
