ConocoPhillips will stick with its plan to boost US light oil production despite limited refining capacity for those grades, CEO Ryan Lance said Thursday.
"Today I don't think there's excessive risk to that piece of the puzzle," Lance said, citing the company's ability to move crude by water if necessary to refiners on the East, West, and Gulf Coasts.
His remarks were webcast from the Barclays CEO Energy Conference in New York.
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Lance noted there is constant capacity "creep" in the US, and was confident refining investments would be made to take advantage of the wide margins for light sweet crude.
"I don't believe margins will stay wide for long periods of time, people are going to make investments to absorb those kinds of margins," he said.
In the Permian Basin, ConocoPhillips plans to increase production by 40,000 b/d of oil equivalent, with oil accounting for roughly 80% of the total by 2017, he said.
From the Bakken and Eagle Ford shale plays, the company plans to add 45,000 and 130,000 boe/d, respectively, over the same period. Oil will reach close to 90% of Bakken output and about 60% of Eagle Ford production.
Analysts have expressed concern about limited US light sweet crude refining capacity in light of booming shale production.
Standard and Poor's expects the capacity ceiling to be reached on the US Gulf Coast in the next two years, the ratings agency said in a report earlier this year. S&P and Platts are units of McGraw Hill Financial.
--Benjamin Morse, firstname.lastname@example.org
--Edited by Kevin Saville, email@example.com