Deep divisions in Texas’s oil industry emerged on Tuesday when regulators heard from supporters and opponents of a plan to cut state oil production by 1 million barrels / day.
Urging support for the proposal, Pioneer Natural Resources (NYSE: PXD) CEO Scott Sheffield told the Texas Railroad Commission that the industry will face a historic economic collapse with 3 to 10 dollars worth of oil in the coming weeks if no action is taken.
Without regulation, “we are going to disappear as an industry like the coal industry,” Sheffield warned.
Texas shale producers Pioneer and Parsley Energy (NYSE: PE) want state regulator to cut production, while many large companies, including Exxon Mobil (NYSE: XOM) and Occidental Petroleum (NYSE: OXY) , opposed the proposal.
Some opponents offered predictions just as bleak as their supporters, including Diamondback Energy (NASDAQ: FANG), CFO Kaes Van’t Hof, who told the panel that his company “would let all of our service providers go” if necessary to reduce production. .
Enterprise Products Partners (NYSE: EPD) co-CEO Jim Teague questioned the motivations of some of the companies looking for cuts, although he did not name the companies, suggesting that they might want a government order so they can get out of certain contracts.
Marathon Oil (NYSE: MRO) CEO Lee Tillman said the market would resolve the oil glut in time, noting that producers plan to cut production by 50% and regulators should be quick to ” Discard”. free market principles. ”
The commissioners, who are expected to vote on the proposal on April 21, have not expressed their fondness.
Meanwhile, a group of Oklahoma oil producers have filed with that state a request for a hearing to review production restrictions; it should take place on May 11.
Other major Permian producers include CVX, CXO, EOG, APA, XEC, RDS.A, DVN, NBL