The main oilfield's peak is hard to hide the ambition for increased production! Exxon Mobil Corporation (XOM.US) diversifies its expansion to alleviate crisis, with Morgan Stanley raising its target to $177.

Exxon Mobil Corporation (XOM.US) recently warned Kazakhstan that Tengiz, the largest oil field in Central Asia, is expected to reach its peak production next year. Worse yet, production from this field will begin to decline thereafter. Exxon Mobil Corporation anticipates that by 2035, its output will drop by nearly 40%, to around 500,000 barrels per day. This is equally significant for Chevron Corporation, as Chevron Corporation is involved in the development of the Tengiz oil field through a 50% stake in the Tengizchevroil (TCO) joint venture. However, despite the impending peak and decline of Tengiz, this does not represent a crisis for Exxon Mobil Corporation. Kazakhstan Still Has "Assets" Although production at Tengiz is set to peak and begin to decline, Exxon Mobil Corporation has another opportunity in Kazakhstan: the Kashagan oil field. This gigantic offshore oil field in the Caspian Sea is operated by a joint venture that includes Exxon Mobil Corporation, Shell, TotalEnergies, and others. Exxon Mobil Corporation believes there is joint investment potential of up to $80 billion for the development of the western region of this oil field. The production from this expansion plan could reach as high as 600,000 barrels per day. However, the oil field is at the center of a long-standing dispute between Kazakhstan and the operating joint venture. Kazakhstan has imposed a $5 billion environmental fine, which the operating parties have yet to pay. In addition, the Kazakhstan government has stated that due to delays in development, the joint venture partners owe it $150 billion in lost revenue, a claim that is currently awaiting international arbitration. Until the dispute with the government is resolved, Exxon Mobil Corporation and its partners will not invest the capital needed to boost production at this oil field. Exxon Mobil Corporation Has Ample Room for Growth Elsewhere The Kashagan oil field is far from the only potential growth driver for Exxon Mobil Corporation. The oil giant is currently investing $100 billion in major capital projects from 2023 to 2030. These investments will increase its oil and gas daily production from last year's 4.7 million barrels to 5.5 million barrels by 2035. Major growth drivers include Guyana, liquefied natural gas (LNG), and the Permian Basin. The company expects that by 2030, production in the Permian Basin alone will double to approximately 2.5 million barrels per day. Recently, the company signed a 20-year fee-based integrated midstream agreement with Targa Resources (TRGP.US) to support its growth in the Permian Basin over the next few years. Targa will build three new gas processing plants to support Exxon Mobil Corporations development in the region and is assessing the possibility of adding five more plants. Additionally, the company is constructing a new 70-mile gas pipeline to support Exxon Mobil Corporations production increase. Targa plans to put this new infrastructure into operation by the first half of 2028. Meanwhile, Exxon Mobil Corporation recently awarded an $1.1 billion pre-investment equipment contract for the Mozambique Rovuma LNG project. The company is expected to make a final investment decision (FID) on this potentially $30 billion project by the end of this year. Exxon Mobil Corporation may also approve an LNG project in Papua New Guinea by the end of this year. These projects will drive growth after 2030. Exxon Mobil Corporation's Growth Engine Is Far from "Stalling" Although the production of one of Exxon Mobil Corporations major oil fields is about to peak and begin to decline, this does not spell crisis for the oil giant. In Kazakhstan, there is another significant potential project in the works. In addition, the company has clear growth opportunities in the Permian Basin, two LNG projects underway, and numerous other opportunities worldwide. While the Kashagan and Rovuma projects carry risks (the latter has been delayed since 2021 due to regional violence), Exxon Mobil Corporation's diversified growth pipeline helps mitigate these risks. Exxon Mobil Corporation has multiple long-term growth drivers, making it one of the most favored oil stocks in Beijing Zhidemai Technology. Wall Street Is Bullish on Upstream Assets Morgan Stanley recently raised its target price to $177 and reiterated its "buy" rating. The bank believes Exxon Mobil Corporation's "value prioritizes production" strategy is paying offcapital spending is disciplined at a range of $27-29 billion for 2026, with funds focused on the Permian Basin, Guyana, and global LNG projects, and the proportion of capacity with a unit cost below $35 per barrel is expected to continue increasing. Additionally, Barclays, Wells Fargo, and TD Cowen maintain a high target price range of $170-$182, based on core arguments: the Golden Pass LNG train 1 is set to produce its first LNG by March 2026, enhancing U.S. export capacity by approximately 15% compared to 2025; the Permian Basin's production target for 2026 is 1.8 million barrels of oil equivalent per day, with proprietary fracturing technology improving recovery rates; the Guyana Uaru project is expected to come online by the end of 2026, with low-cost deepwater assets ramping up; the company plans to return $20 billion to shareholders through share buybacks and a 43-year continuous increase in dividends in 2026.