My kids and I celebrated Mother’s Day with my better half in Dallas last weekend. I hope all the mothers in our industry also enjoyed quality family time. You are the true heroes day in and day out!
Now, let’s look at two pieces of energy news from the past week.
Shangyou Nie
Editor, Well Read
China Makes Major Oil discovery in Iraq
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Zhenhua Oil, a Chinese national oil company, made a major oil discovery in Iraq that reportedly has 8.8 billion barrels of oil in place. If confirmed, this would be one of the most significant discoveries by a Chinese company from overseas investment.
About the discovery:
According to Upstream, Qurnain Petroleum, a subsidiary of Zhenhua Oil, made the oil discovery in the Al-Qarnain Block.
The discovery was announced during a meeting between Iraqi Oil Minister Hayan Abdul-Ghani and a delegation from Zhenhua Oil on 6 May.
Zhenhua spudded the well on 10 January and drilled to a total depth of 2,000 meters.
The well tested 3,248 barrels of light oil from the Mishrif carbonate formation in the Cretaceous.
The discovery is located in the Najaf Province, near the Iraq-Saudi Arabia border.
Background:
According to Iraqi News, the Al-Qarnain Block has an area of 8.8 thousand square kilometers.
It was one of the 29 blocks offered during Iraq’s fifth supplementary and sixth license round held in May 2024.
Zhenhua, with its local partner Midland Oil Company, has a commitment to drill four exploration wells in the block.
The oil discovery was made by the second well drilled in the acreage.
Zhenhua acquired a 2D seismic survey of a more-than-2,850 square-kilometer area from October 2025 through March of this year.
Bigger picture:
According to local press, the new discovery will support the Iraqi government’s ambition to grow its production from the current 4.7 million barrels per day (before the war broke out on 28th February) to 6 million barrels per day by 2029.
If confirmed, this oil discovery represents one of the most important results in the past 15 years in Chinese NOCs’ efforts to invest in overseas oil and gas ventures.
Another successful example is CNOOC’s 25-percent non-operating equity in the ExxonMobil-operated Stabroek Block in Guyana.
Chinese overseas upstream investments have met significant setbacks after they spent billions of dollars to acquire assets/companies between 2010 and 2015.
In recent years, Chinese companies have been shy about investing overseas, investing heavily instead in domestic E&P.
Will this oil major discovery help Chinese NOCs accelerate their pace to look for overseas growth again?
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Independents Raise U.S. Shale Production in Response to New Market Conditions
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As the conflict in Iran continues and the oil price hovers around $100 per barrel, several leading independent American producers have announced plans to increase U.S. shale production.
Who is upping production? Continental Resources, Diamondback Energy, and EOG Resources
Who is not? For now, U.S. majors ExxonMobil and Chevron are sticking to their previous capital programs.
Key context:On 16 April, U.S. Secretary of Energy Chris Wright and Secretary of the Interior Doug Burgum held a call with leading U.S. producers ExxonMobil, Chevron, Occidental, Continental Resources, Diamondback, and Devon Energy to urge them to increase drilling.
Here’s more about producers’ recent moves…
Continental Resources
In early April, the world's largest private oil producer, Continental Resources, said it plans to increase production.
Before the war in Iran broke out, Continental was planning to reduce its capital program by 20 percent to $2.5 billion in 2026 due to prolonged periods of weak oil prices.
Continental Resources was the first large U.S. producer to announce such a plan in view of recent oil price hikes.
Continental Resources did not specify the level of production increase.
In Q4, Continental produced 475,000 barrels of oil equivalent from its holdings in North Dakota, Oklahoma, Wyoming, and Texas.
It stopped drilling in North Dakota in January for the first time in 30 years.
Diamondback
On 4 May, Diamondback issued a special letter to its stockholders, announcing its plan to bring “incremental barrels to the market immediately.”
Diamondback is one of the largest and most-focused independent U.S. shale producers, with a portfolio 100 percent in the Permian Basin between Texas and New Mexico.
Diamondback has a market cap of $53 billion. Its share price has risen 30 percent YTD in 2026 (as of 12 May).
Diamondback will increase its production level from 505,000 to 520,000 barrels of oil equivalent per day, or up 3 percent from its previous 2026 guidance.
Diamondback will run five completion crews for the remainder of 2026 and add two or three rigs “to preserve a healthy backlog of projects to maintain operational flexibility.”
Diamondback will “begin to work down our drilled but uncompleted well (DUC) balance.”
EOG produced 1.2 million barrels of oil equivalent per day in 2025 and projects it will produce 1.3 million barrels of oil equivalent per day in 2026.
It plans to potentially raise production by mid-single digits.
EOG revised its business plan to maintain its $6.5 billion 2026 capital program and shift investments from gas to oil assets before 2H 2026.
EOG has a market cap of $70 billion, and its share price has risen 25 percent YTD (as of 12 May).
EOG has an upstream portfolio in six U.S basins: The Delaware Basin, Eagle Ford Shale, and the Dorado Basin in Texas; the Williston and Powder River basins in the Rocky Mountain region; and the Utica Shale in Appalachia). It also has assets in Bahrain, the United Arab Emirates, and Trinidad and Tobago.
According to the Wall Street Journal, Chairman and CEO Ezra Yacob said that petroleum stockpiles are being depleted and it would take “a while” to refill them.
The bigger picture:
Some suggest that U.S. shale production has plateaued at around 13–14 million barrels per day, especially if the oil price remains at roughly $60 per barrel—close to the break-even level for many producers.
Some U.S. independents are starting to look at overseas growth opportunities. For example, Continental Resources has entered Argentina.
The majors tend to decide their capital programs on longer cycles, rather than reacting to short-term events.
What they are saying:
“We believe there is a legitimate supply-demand imbalance and that the associated price signal is the catalyst to begin to grow production,” said Kaes Van’t Hof, CEO and Director of Diamondback Energy
“Because of our positioning, our preparation, and this price signal, we are bringing incremental barrels to the market immediately,” added Van’t Hof.
“Continental is increasing our capital budget, which will increase production,” said Doug Lawler, President and CEO of Continental Resources.
“You wouldn’t expect us to be changing our plans significantly on the back of eight weeks of disruption,” said Eimear Bonner, Chevron’s CFO, quoted by the Financial Times.
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