Home Local News Energy companies form Permian partnership to invest $100M

Energy companies form Permian partnership to invest $100M

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A group of major oil and gas companies with plays in the Permian Basin and related service companies has announced the formation of an energy alliance, collectively committing more than $100 million over the next several years to spur additional private-sector investment in the region.

The announcement of the Permian Strategic Partnership is scheduled to appear in op-ed pieces today in four area newspapers, including the Hobbs-News-Sun on Page 4.

The 17 major oil companies that have signed onto the alliance are Anadarko, Apache, Chevron, Cimarex, Concho, Devon, Diamondback, Encana, Endeavor, EOG Resources, Halliburton, Occidental, Parsley, Pioneer, Schlumberger, Shell, and XTO Energy.

In the op-ed signed by 18 energy company executives, they said a once-in-a-generation opportunity has brought them together for the common purpose of strengthening the communities in West Texas and southeastern New Mexico where they operate.

“The Permian is poised to provide energy the world needs, create tens of thousands of local jobs, and generate billions in state and local tax revenues. But this potential can only be fully realized if we simultaneously address significant infrastructure challenges and preserve the quality of life that makes so many want to live and work here,” the energy companies said in the op-ed. “With this goal in mind, our companies have formed the Permian Strategic Partnership, an industry resource that will partner with local leaders and stakeholders to strengthen communities across West Texas and southeast New Mexico for decades to come.”

The energy companies said the Permian Basin is becoming one of the most strategically important oil-producing regions in the world, leading the way to American energy security. They said total oil production in the region is expected to more than double in the coming years.

“At that point, the Permian would be an oil-producing superpower trailing only Saudi Arabia, Russia, and the combined output of all other U.S. producing regions,” the energy companies said. “The Permian has the power to strengthen our country’s energy and economic future in a way not previously imagined.”

The energy companies said while the oil and gas industry is inherently cyclical, they are convinced what is occurring in the Permian Basin now is different from the boom-and-bust cycles of the past.

“Advances in technology and improved operating efficiencies have helped us produce safely and profitably even when prices are relatively low,” they said. “We have analyzed various scenarios and believe that, even in a downturn, Permian production will continue to grow in the coming years.”

The energy companies said being a strategically important oil-producing region comes with challenges that are stressing local communities. They said they have listened to local organizations and surveyed thousands of their local employees to begin identifying key challenges and future community needs. The energy companies said local employees emphasized the need for safer roads, superior schools, quality health care, affordable housing and a trained workforce.

“As employers, we want workers to move here with their families, build careers, and become a part of the community,” the energy companies said. “The good news is that the production growth we anticipate will result in billions of dollars of state and local tax revenues that could be directed to help meet these needs. A number of significant charitable foundations are also doing important work in education and infrastructure, and our individual companies are already supporting many community projects. But we feel this uncommon situation requires more.”

The energy companies said they will open an office in the coming months and announce leaders and staff. They said a series of community meetings will begin early next year to gather input from citizens. They said the Permian Strategic Partnership will convene conversations with stakeholders and advocate with state and federal officials to garner support for critical investments in infrastructure improvements in the region.

“We aim to add value to — not duplicate — the important work already being done by local governments, school districts, business organizations, nonprofits and foundations,” the energy companies said. “As energy companies, we know how to drill wells and lay pipelines; we are not experts in areas such as improving public schools or training medical staff. However, we can partner with schools and colleges to help prepare future workers for the job opportunities that await them.”

The energy companies said building new roads, recruiting new doctors and teachers and developing new neighborhoods will require years of work, substantial resources and sustained cooperation among many entities.

“While our primary financial contribution will be the substantial tax revenues our industry generates, we will also continue to provide funds for selected priority projects, both as individual companies and through the partnership,” the energy companies said. “Collectively, we are committed to providing more than $100 million over the next several years as seed money to spur additional private-sector investment.”

Margaret Cooper, policy, government and public affairs manager for Chevron North America Exploration and Production Co., said the Permian Strategic Partnership is “an unprecedented coalition of companies” who have come together to work in partnership with local stakeholders to address infrastructure challenges and strengthen communities across West Texas and southeast New Mexico.

“Earlier this year, PSP completed an initial analysis and fact-gathering stage, which identified the need for safer roads, superior schools, quality health care, affordable housing and a trained workforce as priority focus areas across the Permian Basin,” Cooper said. “Representatives of PSP companies have been meeting with individuals, organizations and elected officials at the community, county, state and federal levels to build awareness and lay the groundwork for future collaboration.”

Hobbs Mayor Sam Cobb said the Permian Strategic Partnership is an exciting opportunity for Lea and Eddy counties.

“What a fantastic opportunity to partner with the private sector to make southeastern New Mexico a world leader in energy production, economic growth and quality of life,” Cobb said. “The cities of Lea and Eddy County have a well-documented history of working together and working with the private sector to make this region of our state one of the most admired in the state and country for its ability and understanding of how to be a good partner and provide opportunities for entrepreneurial growth. I am excited about the opportunity to sit down with the energy alliance and do whatever I can on behalf of Hobbs and our area to make this initiative an outstanding success.”

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