ConocoPhillips CEO Ryan Lance says he isn’t letting anyone at his company rest easy now oil prices have leveled off.
Even as Lance said he sees “light at the end of the tunnel” on prices, he told CERAWeek attendees he continues to implore his executives to make operations more efficient and drive down the break even price on projects.
“Prices could snap back in the next couple years but my fear is you could see low prices on the backside,” he said. “You need a price model that embraces the volatility.”
The standard at Conoco on new projects is they must be able to generate a 10 percent return at $50 per barrel for Brendt crude, Lance said.
During his interview with IHS Markit Vice Chairman Dan Yergin, Lance also expressed disbelief that companies were rushing so quickly to increase production out of the red hot Permian Basin when. He said much about the geology of that play still needs to be understood, making mistakes and less productive wells likely.
“That learning curve is still there,” Lance said. “So why drill into it so quickly? The resource isn’t going anywhere.”