CERAWEEK: U.S. oil output growth faces supply chain challenges -Occidental CEO

Vicki Hollub, President and CEO of Occidental Petroleum, speaks at the 2019 Milken Institute Global Conference in Beverly Hills, California, U.S., April 29, 2019. REUTERS/Lucy Nicholson/

HOUSTON, March 8 (Reuters) – The chief executive of U.S. oil producer Occidental Petroleum Corp on Tuesday said calls for U.S. shale oil producers to ramp up production face significant supply chain challenges.

A lack of materials, skilled labor and other supply chain troubles are “not adequately recognized as a significant impediment for growth” and place limits on the energy industry’s ability to deliver, Occidental CEO Vicki Hollub said at the CERAWeek energy conference in Houston.

“Nobody really anticipated needing to grow significantly,” Vicki said. “If you did not plan for growth, you are not going to be able to achieve growth today,” Hollub said.

She said services companies face difficulties to hire qualified personnel, with onboarding processes including, for example, long training in safety procedures. One staff candidate, she mentioned, decided to drop the hiring process and go to a different company after learning about the extent of safety training.

A decision of oil and gas companies to limit costs and spending to return more cash to shareholders added to the equation, she said.

“Capital discipline today for oil companies is basically no (production) growth,” Hollub said.

Reporting by Sabrina Valle
Editing by Marguerita Choy

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