When the main oil field reaches its peak, it's hard to hide its ambition to increase production! ExxonMobil (XOM.US) diversified expansion solved the crisis, with Damo looking as high as $177

The Zhitong Finance App notes that ExxonMobil (XOM.US) recently warned Kazakhstan that production at the Tengiz (Tengiz) oil field, the largest oil field in Central Asia, will peak next year. To make matters worse, the field's production will start to decline from then on. ExxonMobil expects production to drop by nearly 40% to around 500,000 b/d by 2035.

This has also had a significant impact on Chevron, as Chevron participated in the development of this oil field by holding 50% of the TCO joint venture.

However, although the Tengiz oil field is about to peak and fall, this is not a crisis for ExxonMobil.

Kazakhstan still has a “family base”

Although production is about to peak and begin to decline at the Tiangiz oil field, ExxonMobil has another opportunity in Kazakhstan: the Kashagan (Kashagan) field. This giant offshore oil field in the Caspian Sea is operated by a joint venture that includes ExxonMobil, Shell, Total Energy, etc. ExxonMobil believes there is potential for joint investment of up to 80 billion US dollars for the development of the western region of this oil field. The production of this expansion plan can reach up to 600,000 b/d.

However, the oil field is at the heart of a long-standing dispute between Kazakhstan and the operating joint venture. Kazakhstan has imposed an environmental fine of 5 billion US dollars, which the oil field operator has not yet paid. Furthermore, the Kazakh government stated that the joint venture partner should pay compensation of 150 billion US dollars for loss of revenue due to development delays. The claim is currently awaiting international arbitration. ExxonMobil and its partners will not invest the capital needed to boost production at the field until the dispute is resolved with the government.

ExxonMobil has plenty of room to grow in other regions

The Kashagan field is far from ExxonMobil's only potential driver of growth. The oil giant is currently investing $100 billion between 2023 and 2030 on major capital projects. These investments will increase its oil and gas production from 4.7 million barrels last year to 5.5 million barrels by 2035. Key growth drivers include Guyana, liquefied natural gas (LNG), and the Permian Basin.

The company expects production in the Permian Basin alone to double to about 2.5 million b/d by 2030. 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 ExxonMobil's development in the region, and is evaluating the possibility of building five additional plants. Additionally, the company is building a new 70-mile gas pipeline to support ExxonMobil's increased production. Targa plans to put these new infrastructures into operation in the first half of 2028.

Meanwhile, ExxonMobil recently awarded pre-investment equipment contracts worth US$1.1 billion for the Rovuma LNG project in Mozambique. The company is expected to make a final investment decision (FID) for this potentially $30 billion project before the end of this year. ExxonMobil is also likely to approve an LNG project in Papua New Guinea before the end of this year. These projects will drive growth beyond 2030.

ExxonMobil's growth engine is far from “dead”

Although production at one of ExxonMobil's major oil fields is about to peak and begin to decline, this is not a crisis for the oil giant. In Kazakhstan, it has another potentially major project in the pipeline. In addition to this, the company has clearly visible growth in the Permian Basin, two LNG projects underway, and many other opportunities around the world. Although both the Kashagan and Rovuma projects are associated with risks (the latter was postponed from 2021 due to violent conflict in the region), ExxonMobil's diversified growth pipeline helps mitigate these risks. ExxonMobil has multiple long-term growth drivers, making it one of the best oil stocks to buy.

Wall Street is optimistic about upstream assets

Morgan Stanley recently raised its price target to $177 and reaffirmed its “buy” rating. The bank believes that ExxonMobil's “value over production” strategy is being implemented — capital expenditure will be controlled within the disciplinary range of US$270-29 billion in 2026, capital will be concentrated in LNG projects in the Permian Basin, Guyana and the world, and the share of production capacity with a unit cost of less than 35 US dollars/barrel will continue to increase.

In addition, Barclays, Wells Fargo, and TD Cowen maintain a high target price range of 170-182 US dollars. The core arguments are: Golden Pass LNG production line 1 produced the first batch of LNG in March 2026, and the US export capacity will increase by about 15% compared to 2025; the Permian Basin's 2026 production target is 1.8 million barrels of oil equivalent per day, and proprietary fracturing technology will improve the recovery rate; the Guyana Uaru project is expected to be put into operation by the end of 2026, and the company plans to pass 20 billion dollars in 2026 Dollar share buybacks +43 consecutive years of interest rate increases to give back to shareholders.