The world’s broken supply chain is posing a challenge for oil producers looking to suddenly grow oil production in response to soaring oil prices and shortages stemming from Russia’s war with Ukraine, said Vicki Hollub, Occidental Petroleum’s chief executive.
Her comments came during CERAWeek by S&P Global, a weeklong energy conference and one of the largest in the city.
Producers had planned on keeping production relatively flat this year, she said. Now, they’re trying to quickly ramp up production but supply chains are making that impossible.
“Nobody really anticipated needing to grow significantly,” she said. “That’s the challenge now. If you didn’t plan for growth, you’re not going to be able to achieve growth today.”
Materials such as pipes and sand are slow to come and are inhibiting the kind of production that is needed to serve the world’s sudden shortfall as Russian oil slides from the market.
“The challenge is pretty significant, here, to get back to growth in the Permian,” she said, “and that’s the only basin that’s going to grow U.S. oil production.”
