Inflation Is crimping shale expansion, ConocoPhillips CEO says
(Bloomberg) – U.S. oil-supply growth is being hindered by “rapidly escalating” equipment costs and supply-chain snags, ConocoPhillips Chief Executive Officer Ryan Lance said.
The “extremely tight” market for oilfield workers, particularly in the Permian Basin of West Texas and New Mexico, also is squeezing the energy industry and frustrating efforts to expand oil production, Lance said during a conference call with analysts on Thursday.
Lance, one of the longest-serving major US oil-company CEOs, also cautioned the federal government against any significant changes to the tax structure. Tweaking the tax code could have dire long-term consequences for oil and natural gas investments, he added.
His comments come just days after US President Joe Biden suggested taxing the oil industry’s so-called windfall profits, which the president called “war profiteering.” Lance said calls for windfall taxes are “not a helpful conversation right now.”
ConocoPhillips on Thursday reported third-quarter 2022 earnings of $4.5 billion, or $3.55 per share, compared with third-quarter 2021 earnings of $2.4 billion, or $1.78 per share.
The Houston-based company distributed $4.3 billion to shareholders in the third quarter and an increase in its ordinary dividend effective in the fourth quarter.
“Our Lower 48 business unit accomplished record production of more than 1 million barrels of oil equivalent per day,” Lance said. “We expanded our global LNG portfolio with opportunities in QatarEnergy’s North Field South LNG project and have agreed to capacity at the prospective German LNG Terminal, enhancing our focus on this valuable energy transition fuel.
“By concentrating on low cost-of-supply and low greenhouse gas production, ConocoPhillips is well positioned to compete in near-term cycles and over the long term,” he said.