ConocoPhillips CEO Ryan Lance expressed his optimism about the price of oil during the Argus Americas Crude Summit in Houston on Monday. He claims that the consolidation effort will not result in the demise of tiny independent businesses.
According to the latest Dallas Fed Survey conducted in December, the US oil industry is ready for even greater consolidation to reduce costs, which the majority of US oil and gas businesses forecast rising by as much as 10%. This is good news for the United States, because according to the same Dallas Fed Survey, it was primarily tiny independent enterprises that planned to increase crude oil production.
“There’s always going to be a business for those folks that are picking up assets from the large independent companies like mine or the integrated majors,” Lance said.
ConocoPhillips itself snagged certain assets from Shell and Concho Resources last year in two deals valued roughly $20 billion. The transaction boosted Conoco into America’s second most prolific Permian producer.
This isn’t the first time Conoco has expressed an optimistic outlook on oil prices. Lance predicted in September that crude oil demand would recover to pre-covid levels by early 2022, but that production would be restrained until then.
At the time, Lance cited improving demand, with demand returning to pre-pandemic levels by the end of the fourth quarter 2021 or the first quarter of this year. “We’re pretty bullish on the next couple of years,” Lance added.
