BACKJessica Onsurez | Carlsbad Current-Argus | May 17, 2019
ExxonMobil's development of assets in the Permian Basin is estimated to provide $64 billion benefiting New Mexico over the next four decades, according to a report released by the company Friday.
The company said its investment in the Permian will represent $55 billion in capital expenditures in Eddy and Lea counties.
"The Permian Basin is the engine of America's energy renaissance and New Mexico residents will see direct economic benefits and opportunities from our planned investments," said Chairman and CEO of ExxonMobil Corporation Darren W. Woods, in a news release.
"We will be a significant, long-term economic contributor to the state of New Mexico and will work hard to be a trusted member of the community."
The figures are the result of a study conducted by Impact Data Source for the company, which assumes the price of a barrel at $40.
Approximately $44 billion of the estimated revenue for the state will be the result of new oil and gas developments.
The study estimated another $8.5 billion will be generated by state oil and gas severance taxes.
It also estimates that $1.8 billion in net tax revenue will be contributed to communities in southeast New Mexico where ExxonMobil operates.
Gov. Michelle Lujan Grisham said the study results mean great things for New Mexico's future economic stability.
"The benefit to this state's bottom line, as represented by investments from companies like ExxonMobil, has been enormous," Lujan Grisham said in a news release.
"My administration has been and will continue to be responsive to changes in the energy sector and the need for meaningful regulation and diversification as a means of ensuring a sustainable future - for our children, their education, the infrastructure that will support our collective future and more."
Last year, New Mexico's budget saw a surplus of $2 billion generated largely by oil and gas operations in southeast New Mexico.
ExxonMobil is the largest publicly traded international oil and gas company. Its subsidiary XTO Energy holds
Study highlights
- $6 billion for higher education
- $10 billion for health and human services
- $18 billion for public schools
New jobs
Estimates from the study indicate that over the next 40 years, approximately 4,100 jobs will be created by the company in New Mexico.
It said the jobs will result in a $29 billion investment in wages, salaries and benefits.
"In terms of employment, ExxonMobil's drilling and completion activity will support approximately 2,408 direct jobs per year and about 3,319 indirect and induced jobs per year - totaling more than 5,700 jobs per year in the state of New Mexico," an executive summary of the study read.
At its peak, the study read, the company is expected to support over 14,000 direct jobs.
In February, the Carlsbad City Council agreed to sell nearly 47 acres in the Carlsbad Airport Industrial Park for more than $2 million to XTO Energy for the construction of the company's new regional headquarters.
XTO was set to break ground on that facility by summer 2019. Company officials at the time said the headquarters could house up to 300 employees.
Growing operations
XTO Energy Inc. could drill 6,500 new wells in Eddy and Lea counties.
That development represents 19 years of growth in the study, which would result in about $7.1 billion in expenditures related to facilities construction.
"By 2025, ExxonMobil's oil production could reach 550,000 barrels per day and the company's natural gas production could reach 2.4 billion cubic feet per day, which is comparable to the cumulative production of some U.S. states," the summary read.
In New Mexico, the Bureau of Land Management (BLM)reported an all-time high of oil production on federal land at 214.1 million barrels produced in fiscal year 2018.
The number of wells started in fiscal year 2018 also grew in the last two years, according to the BLM, from 847 in FY 2016 to 1,919 in FY 2018 – an increase of 127 percent or more than 1,000 wells.