More than two dozen employees of Denver-based shale producer Ovintiv Inc. sent form letters this week to Texas energy regulators opposing any state-mandated oil production cuts in the face of plunging energy prices.
The state's Railroad Commission (RRC), which has the authority to mandate production curbs in the state, will consider next week a proposal to require larger oil producers to cut output by 20% beginning May 1.
The proposal was submitted by shale producers Parsley Energy Inc. and Pioneer Natural Resources Co., and backed by RRC Commissioner Ryan Sitton, as a way to curb a free fall in crude oil prices.
The state's two other commissioners took to Twitter last week to distance themselves from Sitton's advocacy, saying they had not yet made up their minds. Passage requires two of three to agree on curbs, which would be the first by the state in nearly 50 years.
Ovintiv, formerly known as Encana, has core operations in Canada, Oklahoma and Texas. Some 30 employees, ranging from a legal analyst and lease operators to the head of investor relations, sent emails as of April 7 objecting to the plan.
Michael Schmidt, Ovintiv's Texas-based investor relations chief, submitted one of the letters arguing "Texas should remain a free market state." He did not immediately return a call and email requesting comment.
Oil prices collapsed last month to around $20 a barrel after Saudi Arabia and Russia agreed to pump full bore while the spread of the coronavirus zapped demand for fuel. Ovintiv employees argued that coordinated cuts would "give Saudi Arabia, Russia and other OPEC nations leverage over Texas in perpetuity."
Other submissions were mixed, with Occidental Petroleum Corp. opposed to cuts and Unitex Oil & Gas LLC and Hibernia Resources III LLC in support of the cuts.
Recommended Reading
OPEC Gets Updated Plans From Iraq, Kazakhstan on Overproduction Compensation
2024-08-22 - OPEC and other producers including Russia, known as OPEC+, have implemented a series of output cuts since late 2022 to support the market.
E&P Highlights: July 22, 2024
2024-07-22 - Here's a roundup of the latest E&P headlines, with LLOG acquiring 41 blocks in the Gulf of Mexico and Saipem securing $500 million in contracts from Saudi Aramco.
Tech Trends, URTeC Edition: Unconventional Solutions for Unconventional Resources
2024-07-16 - In this month’s Tech Trends, which takes place at the 2024 Unconventional Resources Technology Conference, new technologies are on display that ensure both efficient and sustainable operations.
IOCs See Opportunity in Offshore Mexico, Despite Potential for Policy Changes
2024-08-14 - Five IOCs with offshore experience and capital—Eni, Harbour, Talos, Wintershall Dea and Woodside—continue to pursue promising opportunities offshore Mexico despite the country’s energy sovereignty push in favor of state-owned entities Pemex and CFE.
E&P Highlights: Aug. 26, 2024
2024-08-26 - Here’s a roundup of the latest E&P headlines, with Ovintiv considering selling its Uinta assets and drilling operations beginning at the Anchois project offshore Morocco.