Exxon Pushes 50% Permian Growth as Chevron Prioritizes Cash Flow Over Expansion

Exxon Mobil and Chevron, two of the largest oil producers in the Western Hemisphere, are pursuing divergent strategies in the U.S. Permian Basin, the nation’s top oil-producing region. Exxon is charting an aggressive expansion path, aiming to increase production by 50% over the next five years, with plans extending beyond 2030. Meanwhile, Chevron is shifting its focus to stabilizing output and prioritizing free cash flow [1].

The divergence became more pronounced after the two companies were recently compelled to form an uneasy partnership. A ruling by an International Chamber of Commerce arbitration panel on July 18 allowed Chevron to complete its $53 billion acquisition of Hess Corporation, including its 30% stake in Exxon’s oil discovery in Guyana. This move marked a strategic turning point, reshaping the competitive landscape between the two oil giants [1].

The Permian Basin remains central to their operations. It accounts for nearly half of the U.S.’s record 13.4 million barrels per day of crude oil production. As of the second quarter of 2025, Exxon reported Permian production at 1.6 million barrels of oil equivalent per day, while Chevron achieved its 2025 target of 1 million barrels per day. Exxon has set an ambitious goal of reaching 2.3 million barrels daily in the Permian by 2030, leveraging scale and technological advantages to drive cost efficiency and long-term growth [1].

Chevron, on the other hand, is aiming to maintain a “plateau” of production. CEO Mike Wirth emphasized that, for now, stability takes precedence over expansion, with a focus on disciplined capital allocation. “Growth is less the objective than free cash flow,” Wirth stated during an earnings call. This approach reflects Chevron’s broader strategy to balance growth with financial prudence [1].

Despite their contrasting strategies, both companies faced a decline in net income due to lower oil prices. Exxon’s second-quarter net income fell to $7.1 billion from $9.2 billion in the same period a year ago. Chevron’s net income also dropped, falling to $2.5 billion from $4.4 billion year over year [1].

The Guyana ruling was a pivotal moment for both firms. The decision allowed Chevron to acquire Hess’ stake in the high-yield offshore project without triggering Exxon’s right of first refusal. Exxon’s CEO, Darren Woods, described the outcome as a “surprise,” noting that the tribunal interpreted the contract differently from what he believed was its intent. However, Woods acknowledged the ruling and emphasized that shared production in Guyana is expected to reach at least 1.3 million barrels of oil equivalent per day by 2030 [1].

Chevron’s acquisition of Hess is also seen as a strategic move to offset recent exploration challenges. The company has relied more on onshore U.S. production and cost reductions in recent years. Wirth confirmed that while exploration will continue to grow, the company remains committed to capital discipline [1].

Source: [1] Fortune – [https://fortune.com/2025/08/01/forced-frenemies-exxon-chevron-diverging-paths-booming-permian/](https://fortune.com/2025/08/01/forced-frenemies-exxon-chevron-diverging-paths-booming-permian/)