Inpex Corp of Japan, Abu Dhabi National Oil and ExxonMobil have reached an agreement aimed at increasing the output capacity of an oil field in Upper Zakum to reach a level of one million barrels a day by 2024. According to a statement that was released by Abu Dhabi National Oil signing of the agreement took place during an energy conference that was being held in Abu Dhabi.
The oil field in Upper Zakum is the second biggest offshore field on the planet. It is also the fourth biggest oil field globally. Previously Abu Dhabi’s plan had been to boost the production capacity of the offshore oil field in Upper Zakum to 750,000 barrels a day by 2017/2018.
ExxonMobil’s and its partners’ plans to boost production in Upper Zakum come in the wake of a move by oil producers including the ExxonMobil to use a so-called geological back door in order to access Permian Basin’s vast deposits. Consequently instead of accessing the deposit from the state of Texas where they are located, the rising costs are forcing the oil producers to use New Mexico, a neighboring state.
In the last five months, there has been an increase of 25% in drilling activity on the part of the Permian Basin which is located in New Mexico with the number of rigs now rising to 75. Texas however has seen a contraction of 2% with the number of rigs declining to 490 per data from Austin-based consultant Drilling Info Inc.
“When we talk about the Permian, we tend to think of the Permian as West Texas. We do tend to ignore New Mexico,” Drilling Info’s market intelligence vice president, Bernadette Johnson, said.
The pipeline network in Austin is also undergoing an expansion and this could result in sustained growth in production and development. Earlier in the year ExxonMobil ventured into New Mexico by acquiring Bass family assets valued at $5.6 billion. According to Exxon the drilling prospects of the 250,000 acres it acquired will stretch for up to two decades.
In the last few years oil and gas firms have made investments in New Mexico totaling approximately $13 billion via mergers and acquisitions, per Steve Vierck, an economic development official in Lea County, New Mexico. According to data from the Energy Information Administration a record 462,000 barrels of crude per day were produced in the state in August and this was twice what was pumped out of New Mexico six years ago.