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ConocoPhillips' CEO Ryan Lance is bullish on the price of oil, the executive said on Monday at the Argus Americas Crude Summit in Houston.
Lance further expressed his view that the U.S. oil industry is poised for even more consolidation in an effort to bring down costs—costs which the majority of U.S. oil and gas companies see as rising as much as 10%, according to the latest Dallas Fed Survey conducted in December.
Lance said that the consolidation drive, however, doesn't mean that small independents are going to disappear. For the United States, this is good news, because in that same Dallas Fed Survey from December, it was mostly the small independent firms that had plans to raise crude oil production.
"There's always going to be a business for those folks that are picking up assets from the large independent companies like mine or the integrated majors," Lance said.
ConocoPhillips itself snagged some assets from Shell and Concho Resources last year in two deals worth nearly $20 billion. The deal catapulted Conoco into America's second most prolific Permian producer.
This week isn't the first time Conoco has had a bullish view of oil prices. In September, Lance forecast that crude oil demand would bounce back to pre-covid levels by early 2022, but until that time, production would be constrained.
At the time, Lance cited improving demand, with demand returning to pre-pandemic levels by the end of the fourth quarter 2021 or the first quarter of this year. "We're pretty bullish on the next couple of years," Lance added.
While production in the United States has not yet returned to pre-pandemic levels, demand is flooding back, creating a tightening market and triggering higher oil prices.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.