Shale discipline even at $200/bl: Ex-Pioneer CEO

Public independent shale oil producers will remain disciplined and keep production steady even if crude prices soar on geopolitical tensions, according to the former chief executive officer of Pioneer Natural Resources.

"Even if oil gets to $200/bl, the independent producers are going to be disciplined," Scott Sheffield said today at the Columbia Global Energy Summit in New York.

Public independents showed restraint when oil prices jumped in the immediate aftermath of Russia's invasion of Ukraine in 2022, as they focused on improving shareholder returns rather than ramping up production to take advantage of short-term prices, he said.

One benefit of the recent wave of consolidation is that it may kickstart some growth in a sector that has showered shareholders with excess cash via dividends and share buybacks in recent years.

Before Pioneer agreed to be bought for $59.5bn by ExxonMobil late last year, the company was only increasing output at around 5pc a year. Once the acquisition closes, the top US oil major is going to grow Pioneer's assets at 10-15pc a year, said Sheffield.

"That's an example where somebody is stepping up and adding production," he added.

Global crude prices have moved very little since the weekend when Israel and allies thwarted a massive missile and drone attack from Iran. WTI today fell by just 5¢/bl to $85.36/bl while June Ice Brent fell by 8¢/bl to $90.02/bl.

The industry veteran stepped down as chief executive at the end of last year but remains on the board of Pioneer.

By Stephen Cunningham