HOUSTON, April 16 (Reuters) - ConocoPhillips’ soon-to-be spun off exploration and production arm aims to increase production volume 3 to 5 percent annually, the CEO of what will be the largest independent upstream company in the United States told analysts on Monday.
That production growth “will take us to over 1.8 million barrels per day by 2016,” said Ryan Lance, who will head the spinoff company Phillips 66 but now leads international exploration and production for the integrated oil major.
ConocoPhillips expects 2012 output of the spinoff to be 1.55 million to 1.6 million barrels of oil equivalent per day.
ConocoPhillips will spin off its refining, marketing and transportation arm, Phillips 66, at the end of April to create separate pure-play upstream and downstream companies. Lance was named in October to run the new independent producer.
Lance told analysts that 26 percent of the company’s North American production in 2016 will come from liquids-rich U.S. shale opportunities in the Eagle Ford and Permian plays in Texas and the Bakken in North Dakota. The company also is seeking to expand its shale positions.
“Initially, we just really scratched the surface right now and we’ve got to work on that,” Lance said. “You want to be certainly a first mover or a very, very fast follower, and that’s our intention.”
He added that the biggest challenge to growing shale output “starts and ends with infrastructure in the U.S.” to transport and process oil and natural gas liquids
Globally the company has 43 billion barrels of resources to convert to “captured” reserves that will “provide a means to deliver growth well beyond 2016,” Lance said.