Tags: Chevron | Oil | Gas | Production

Chevron Targets 20% Oil, Gas Production Growth by End of 2017

Tuesday, 13 Mar 2012 09:38 AM

Chevron Corp., the second-largest U.S. energy company by market value, plans to boost oil and natural-gas output by one-fifth through the end of 2017 with new wells from Australia to the Gulf of Mexico.

Key projects underpinning Chevron’s growth plans include the Gorgon liquefied natural gas complex in Australia as well as deep-water, heavy-oil and so-called unconventional projects such as shale gas, Vice Chairman George Kirkland said in remarks prepared for a analyst presentation today in New York.

“For years, we have had strong positions in deep-water and heavy oil,” Gary Luquette, president of Chevron’s North American exploration and production unit, said in the prepared remarks. “Our capabilities and technology make us a leader in these asset classes where we see significant growth opportunities.”

Brent crude prices, a global benchmark, have risen 5.4 percent this year from the 2011 average of $110.91 a barrel. Chevron produces three-quarters of its oil outside of the U.S.

Chevron holds rights to explore for oil and natural gas in shale formations from China to Argentina to the U.S., Bobby Ryan, vice president of global exploration, said in a Feb. 8 speech. The company’s unconventional exploration leases and concessions cover 8 million acres, an area more than twice the size of Connecticut.

Chevron said in January it expects oil and gas output to rebound slightly this year to the equivalent of 2.68 million barrels of crude after surging prices cut 2011 production by 3.3 percent. Production-sharing contracts in some nations reduce foreign operators’ share of output when global oil prices increase.

Capital Spending

John Watson, Chevron’s chairman and chief executive officer, is planning to spend $32.7 billion this year on capital projects including oil platforms, gas-export plants and refinery equipment, a 12 percent increase from 2011, , according to a Jan. 27 company presentation. Partner companies and affiliates will cover $3 billion of this year’s spending plan.

Chevron added the equivalent of 1.67 billion barrels in reserves last year, enough to replace 171 percent of 2011 production. It was the company’s best reserves performance since 2005.

Exxon Mobil Corp. of Irving, Texas, is the largest U.S. energy company by market value.


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