Exxon Expands Automated Drilling in Permian to Boost Oil Production

ExxonMobil (NYSE:XOM) is stepping up its use of automated drilling technology in the Permian Basin as the U.S. energy major seeks to improve safety, accelerate well development and support a substantial increase in oil production.

At automated rigs in West Texas, robotic equipment is increasingly taking over tasks traditionally performed by workers on the drilling floor. Operators can control machinery from an office on the rig, including systems used to handle steel drilling pipes weighing around 2,000 pounds.

Moving these activities away from personnel is intended to reduce exposure to one of the highest-risk areas of a drilling operation while also allowing crews to concentrate on planning and other tasks.

Exxon Targets 50% Automated Rig Fleet by 2028

Exxon currently operates more than 30 drilling rigs across the Permian Basin in Texas and New Mexico, with two already equipped with robotic automation.

The company plans to increase automated rigs to approximately a quarter of its fleet next year before reaching half of the fleet by 2028, Bart Cahir, Exxon’s senior vice president of unconventionals, told Reuters.

The strategy forms part of Exxon’s broader effort to extract more hydrocarbons from the Permian, the largest U.S. oil-producing basin.

The region helped transform the U.S. into one of the world’s leading oil producers following the shale boom, but the relatively rapid decline rates of shale wells have increased pressure on operators to find technologies capable of improving productivity and recovery.

Permian Production Target Set at 2.5 Million Boepd

Exxon intends to increase its Permian production by almost 40% to 2.5 million barrels of oil equivalent per day by 2030.

That strategy contrasts with rival Chevron, which plans to maintain output at approximately 1 million boepd while placing greater emphasis on generating free cash flow.

Automated rigs represent one part of the combination of technologies and operating strategies Exxon is deploying to achieve its production ambitions.

“When we take people off the rig floor, those same individuals are now able to think ahead and plan for the next operation and that combination gives us efficiency,” Cahir said. “This is the productivity play.”

Robotic Rig Delivers One of Exxon’s Fastest Wells

Exxon introduced its first automated drilling rig last year, using equipment supplied by drilling contractor Helmerich & Payne.

The rig subsequently drilled approximately two miles horizontally underground in just over six days, making it the third-fastest drilling performance in Exxon’s history.

At one automated operation in Midland, robotic arms handle drill pipe more than two storeys tall, positioning individual sections before connecting them to the drill string as drilling progresses deeper underground.

Rig personnel coordinate with Exxon’s central operations team in Houston to determine the precise movements required from the automated equipment.

Automation Designed to Improve Safety and Efficiency

Safety is another major motivation behind Exxon’s automation programme.

Traditional drilling floors contain heavy machinery and pressurised equipment, creating significant risks for workers. On one of Exxon’s automated rigs, the drilling floor is enclosed by a gate carrying the warning “Red Zone: Restricted Area.”

“In the history of well drilling activity, about a third of significant injuries that occur happen on the rig floor,” Cahir said. “By getting people out of that higher risk area, we’re essentially eliminating that risk.”

Removing workers from these areas can also reduce operational variability, potentially increasing the number of feet drilled each day and improving overall rig productivity.

Exxon Develops More Than 40 Permian Technologies

Automation is only one element of Exxon’s wider technology strategy for the Permian.

The company is developing a portfolio of more than 40 technologies intended to double the amount of oil it can recover from the basin by the early 2030s.

Shale producers typically recover only around 10% of the oil contained underground because hydrocarbons are trapped within dense, tightly compacted rock formations.

Improving that recovery rate could become increasingly important as questions emerge over the longer-term production trajectory of the Permian Basin. For ExxonMobil (NYSE:XOM), combining automation with enhanced recovery technologies is central to its ambition of continuing to grow output while improving safety and operating efficiency.

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