ConocoPhillps’ Willow project to reach first production in “four more winters;” expects modest Permian growth

Bethany Fischer, Digital Editor, World Oil March 19, 2024

(WO) – During CERAWeek by S&P Global’s second day, ConocoPhillips’ CEO Ryan Lance announced that his firm’s highly-anticipated Willow project in Alaska is making developmental headway.

ConocoPhillips CEO Ryan Lance

Sitting down with S&P Global’s Dan Yergin, Lance also discussed Biden’s controversial LNG export ban, the U.S.’ unprecedented production growth in 2023, the role of artificial intelligence, and regulatory issues plaguing the U.S. oil and gas industry.

“Four more winters” until first Willow production. This time last year, CERAWeek attendees were anxious to hear about the fate of ConocoPhillips’ massive Willow project in Alaska. The project, which is expected to reach production levels of 180,000 bopd at its peak, received regulatory approval in December 2023. Lance was happy to share that the company is making swift progress developing the facility.

Lance predicted that first production from its Willow development will occur in “four more winters.” The CEO applauded the project as an important boost for Alaska’s economy, creating many jobs and enhancing U.S. energy security.

Thoughts on LNG export ban. Lance poignantly acknowledged that, in this industry, the seeds you plant take years to come to fruition. For example, the low prices being seen today are due to excess supply from 2022. This LNG export pause, Lance says, will have long-term repercussions.

Lance echoed sentiments made by many at CERAWeek, including Chevron CEO Mike Wirth—studying the effects of LNG exports is understandable, but a long pause risks potential investments.

Permian growth expected to continue. Yergin asked the CEO a question that will be posed to many throughout CERAWeek: Was the unprecedented growth in the U.S. Permian basin in 2023 a blip?

Lance doesn’t seem to think so. While Permian production growth will slow in 2024 throughout the rest of the decade, it’s still on the increase. Lance predicted that output from the Permian will eventually reach over 14 MMbopd.

Consolidation: Why now? Mergers and acquisitions in the oil and gas industry seem to be a dime a dozen now, following megadeals from ExxonMobil, Chevron and more. When asked why an uptick in activity is happening now, as opposed to later, Lance said that it’s the nature of the industry.

He explained that consolidations help increase scale and inventory while operating more efficiently. It’s healthy for business, especially the oil and gas business. While he wouldn’t elaborate on specifics, the CEO predicts the M&A trend is far from over.

Additionally, Lance called out the current administration for its “unrealistic” regulations. From methane fees that require undeveloped technology to quantify, to Gulf of Mexico permitting delays, the current system creates uncertainty and hostility. Expect more of this sentiment from industry leaders as the week continues.

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