ExxonMobil chief executive Darren Woods has long contended that oil and gas will remain central to the world’s energy mix despite efforts to drive down emissions created by burning them. This week he placed a $60bn bet on this proposition.
The US energy supermajor’s $59.5bn deal to acquire Pioneer Natural Resources will make it the dominant producer in the oil and gas-drenched Permian Basin of Texas and New Mexico. Tacking on Pioneer will immediately double Exxon’s Permian production to 1.3mn barrels of oil equivalent per day. Their combined acreage will further drive the basin’s output to about 2mn b/d by 2027. All told, Exxon will have access to 16bn oil-equivalent barrels, with 15 to 20 years of remaining inventory.
It is an audacious wager at a time when the International Energy Agency asserts that global demand for fossil fuels will peak before 2030, and must fall sharply in order to avoid the worst effects of global warming.