The pandemic-induced crash has devastated the U.S. shale patch, threatening hopes for a production recovery in 2020. The fact that it’s time for a change to the current shale model, which had already fallen out of favor with Wall Street in recent years for failing to generate returns, is not lost on Vicki Hollub, CEO of Houston-based Occidental Petroleum Corp.
Speaking during the opening day of the annual Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC) where energy ministers and global leaders convened to discuss post-pandemic market recovery, geopolitics and energy transition, Hollub laid out the steps shale producers should take to survive.
“In a lower-for-longer price environment, we are faced with a situation that U.S. shale growth model must change,” she said during an executive panel discussion on Nov. 9. “Rather than being a growth model, we have to adopt a value model, which means we need to focus on survival by getting full-cycle costs down, not just drilling and completions cost.”