March 7, 2018, 3:01 AM MST
Chevron’s long-ignored acreage in the Permian Basin has made it a shale leader.
Bloomberg Businessweek: By Kevin Crowley and Javier BlasIn the control room of Chevron Corp.’s Scharbauer SE71 oil well, midway up a 150-foot rig in the heart of the Permian Basin, Operations Manager Scott Nash gives instructions to a contractor guiding a robotic arm screwing lengths of steel drilling pipe together. The procedure may save less than a minute per connection compared with the traditional way Chevron used to join pipe. And as recently as five years ago, the company wouldn’t have considered such a high-tech solution, especially in this arid West Texas landscape, long considered a poor candidate for profitable exploration. But today the Permian is so important to Chevron’s fortunes that saving 10 seconds each time drill pipes are linked can translate into millions of dollars in cost savings across Chevron’s huge operations there.
For Chevron, which spent the 1990s and early 2000s breaking deep-sea drilling records in the Gulf of Mexico and elsewhere, the shift to the Permian means going toe-to-toe with the fast-moving independent wildcatters, such as Mark Papa and Harold Hamm, who dominated the first chapter of the U.S. shale revolution. Chevron is determined not to let its late start hold it back. “We’re neck and neck with the little companies, and we’re still in the learning phase,” Nash says. “The 800-pound gorilla is in the room.” Read more…