Business24 August, 20263 min read
Exxon Automates Permian Basin Rigs To Boost Oil Output, Targeting 15 By 2028
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Exxon has automated two Permian rigs and targets 15 automated rigs by 2028. The automation drive aims for Permian output around 2.5 million boe per day by 2030.
7 outlets told this the same way.
Exxon automates Permian rigs
Exxon plans to boost crude output in the Permian Basin by automating more of its rigs, with two rigs already fully automated and the company seeking to automate as many as 15 by 2028, Reuters reported. In west Texas, an ExxonMobil contractor sits in a small office on a rig and uses on-screen commands to operate robotic machinery and move tall steel pipes weighing roughly 2,000 pounds, a task typically overseen by workers on the rig floor. Exxon said the automation reduces the odds of accidents and employee injury, and it wants to retrofit its more than 30 rigs across the region in the coming years.
The company aims to lift its Permian production by 40% by 2030, from about 1.7 million barrels per day this year to 2.5 million barrels per day at the start of the next decade. Exxon’s plan also includes a cost target tied to breakeven, with the company aiming for producing oil at a breakeven point of $35 per barrel by 2027 and $30 per barrel by 2030.
Safety and productivity claims
On one automated rig in Midland, access to the drilling floor is controlled by a gate marked with a “Red Zone: Restricted Area” sign, and a Grim Reaper illustration highlights the danger posed by heavy machinery and high-pressure systems. Bart Cahir, Exxon’s senior vice president of unconventionals, said in an interview on the rig, “When we take people off the rig floor, those same individuals are now able to think ahead and plan for the next operation and that combination gives us efficiency,” describing it as “This is the productivity play.” Cahir said that in the history of well drilling activity, “about a third of significant injuries that occur happen on the rig floor,” and that removing workers from these so-called Red Zones is meant to “essentially eliminate that risk.”
Exxon plans to expand automated rigs to one-quarter of its fleet next year, progressing to half of the fleet by 2028, as it also develops a portfolio of more than 40 technologies intended to double oil recovery in the Permian by the early 2030s. The first automated rig in the Permian, supplied by drilling contractor Helmerich & Payne, was deployed last year and completed a horizontal section of two miles underground in just over six days, Exxon said.
Targets, rivals, and market backdrop
Exxon’s automation push is tied to production targets that it says will strengthen its Permian dominance, with planned output rising from about 1.7 million barrels per day to 2.5 million barrels per day at the start of the next decade. Chevron, the basin’s next-top producer, has said it plans to maintain its current level of just 1 million barrels per day through 2040, while Exxon’s plan is to boost production in the West Texas basin by 40% by 2030. The Daily Upside also linked the company’s disclosure to market conditions, noting that on Monday “as markets digested the potential impacts of an ‘Economic D-Day’ waged by the US against Iran and its oil industry,” Exxon told Reuters about its automated drilling.
The same report said exports of US crude hit an all-time high of 5.7 million barrels a day in May, and it described how a temporary US-Iran ceasefire reopened the Strait of Hormuz after exports contracted in June and July. In the background of the sanctions talk, US Treasury Secretary Scott Bessent announced the “Economic D-Day” and floated harsh sanctions for countries that continue to purchase Iranian oil, a move the report said may increase demand for US oil.