Exxon CEO on U.S. election: "Unclear how 'drill, baby, drill' translates into policy"

• According to Exxon CEO Darren Woods, there are no external limitations to U.S. shale oil production.
• The oil and gas industry's deployment of capital to generate shareholder returns drives production levels in the U.S., according to Woods.
• The CEO stated that no change would occur as a result of a political shift.

Exxon CEO Darren Woods stated on CNBC on Friday that the outcome of the U.S. presidential election on Nov. 5 will not impact oil production levels in the short- to medium term.

On the campaign trail, former President Donald Trump advocated for unrestricted oil and gas production to reduce energy costs and combat inflation, encapsulating his energy policy in three succinct words: "Drill, baby, drill."

Woods expressed uncertainty about how "Drill, baby, drill" translates into policy after the largest U.S. oil and gas company reported third-quarter results on Friday, according to CNBC's "Squawk Box."

The U.S. has produced record amounts of oil and gas during the Biden administration, according to Woods, who stated that U.S. shale production does not face constraints from "external restrictions."

In the past six years, the U.S. has been the top producer of crude oil globally, surpassing Saudi Arabia and Russia, as per the Energy Information Administration.

The CEO stated that the oil and gas industry is the primary driver of U.S. output, with technology and investment being used to achieve shareholder returns based on the break-even cost of production.

According to Woods, we won't observe any changes due to political shifts but rather based on the economic climate. He stated that no one is formulating a business strategy in response to a political agenda.

The CEO stated that although shale production has not been hindered by limitations on acquiring new land, there are regions, such as the Gulf of Mexico, that have not been exploited due to federal authorization.

Unconventional shale resources are available in the short- to medium term, and it's necessary to develop them based on market dynamics, according to Wood.

According to an August note from Morgan Stanley, the majority of shale resources in the U.S. are on private land and regulated at the state level. Approximately 25% of oil and 10% of natural gas is produced on federal land and waters subject to permitting.

During her presidential campaign, Vice President Kamala Harris expressed opposition to fracking. However, she has since changed her stance in an attempt to win over voters in Pennsylvania, a key swing state with a significant natural gas industry.