April 8, 2020 / 10:05 PM / 2 months ago

Exxon Mobil opposes Texas production cuts - letter

April 8 (Reuters) - Exxon Mobil, the largest U.S. oil producer, on Wednesday said it opposes Texas energy regulators’ mandating any oil production cuts in the face of plunging energy prices.

Exxon called the free market “the most efficient means of sorting out the extreme supply and demand imbalances we are now experiencing,” in a letter from Staale Gjervik, president of Exxon’s shale division, to state regulators.

The state’s Railroad Commission, which has the authority to mandate production curbs in the state, will consider next week a proposal to require larger oil producers to cut output by 20% beginning May 1.

The proposal was submitted by shale producers Parsley Energy Inc and Pioneer Natural Resources Co, and backed by Commissioner Ryan Sitton, who has said the idea should be considered as a way to curb a free fall in crude oil prices and stabilize the industry.

The state’s two other commissioners took to Twitter last week to distance themselves from Sitton, saying they had not yet made up their minds. Passage requires two of three to agree on curbs, which would be the first by the state in nearly 50 years.

Reporting by Jennifer Hiller; Editing by Cynthia Osterman

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