By Kevin Crowley on 2/24/2021
HOUSTON (Bloomberg) –Strong demand for crude oil and low growth rates from shale mean OPEC and its allies no longer need to be worried about competition for market share from the U.S., according to Pioneer Natural Resources Co.
“I’m still a strong believer that demand is going to come back strong, both on airlines and also driving around the world once we get herd immunity,” CEO Scott Sheffield said on a conference call Feb. 24. “I’m confident that we can assume the Iranian barrels into the marketplace over time and then U.S. shale is no longer going to be a threat to OPEC and OPEC+.”
Covid-19 knocked about 2 million barrels a day from America’s overall oil production as demand cratered, and those supplies may not recover completely given the financial stress the industry has endured for the last few years. Investors are demanding lower output growth and more cash returns, even as oil prices rally.
Pioneer will limit production growth to 5% a year over the long term and plans to pay back three-quarters of its free cash flow to shareholders rather than spending on new drilling, Sheffield said.Click here to subscribe to the World Oil energy newsletter, and receive exclusive industry news and analysis in your inbox each weekday.