Chevron Corp. (CVX) expects to increase its oil and natural gas production by more than 20% by 2017, the company said Tuesday at its annual investor conference.
Chevron Corp. (CVX) expects to increase its oil and natural gas
production by more than 20% by 2017, the company said Tuesday at its annual
investor conference.
Chevron is in the midst of completing a number of expensive, large-scale
projects meant to raise production around the globe, including a massive
natural gas project in
Australia
and
new oil wells in the ultra-deep waters in the U.S. Gulf of Mexico. The company
hopes to boost its daily oil and natural gas production to 3.3 million barrels
in 2017 from the nearly 2.7 million barrels it averaged in the fourth quarter
of 2012.
"Our key development projects remain on track," said John Watson,
Chevron's chief executive.
Global oil companies have scouted the globe for new production fields as such
countries as
China
and
India
increase their energy appetite. The two countries are expected to increase
their natural gas imports by 10% a year for the next decade, Mr. Watson said. Chevron,
the second-largest
U.S.
oil
company in terms of capital after Exxon Mobil Corp. (XOM), is spending $36.7
billion in 2013 alone to search for and develop fields in nearly every
continent.
"Spending in 2014 and 2015 will be higher," Mr. Watson said.
"Any legacy-sized asset will be expensive."
After new projects come online, Chevron expects to generate $50 billion in cash
in 2017, up more than $10 billion from 2012, said Patricia Yarrington,
Chevron's chief financial officer.
Chevron expects to export natural gas starting in early 2015 from its Gorgon
project and the following year from its Wheatstone project, both in
Australia
, said
George Kirkland, Chevron's head of upstream operations. The two projects are
expected to have a combined capacity of more than 15 million metric tons a
year.
Chevron last month said it started test production at the St. Malo well in the
relatively undeveloped Lower Tertiary trend far out in the
Gulf
of Mexico
. Oil production from the well, more than 20,000
feet under the sea floor, was more than 13,000 barrels a day despite being
constrained by the use of test equipment, the company said.
Chevron expects St. Malo and its twin well, Jack, to ultimately produce 177,000
barrels a day.
Chevron, of
San Ramon
,
Calif.
, also
may expand its operations in unconventional onshore fields in
North
America
, including the
Permian
Basin
in
Texas
and
New
Mexico
and the Marcellus gas field in
Pennsylvania
, the
company said. Hydraulic fracturing, or fracking, and other recent innovations
in drilling techniques have yielded growing amounts of oil and natural gas from
those and other shale rock formations.
Chevron plans to "selectively pursue growth" in petrochemicals and
lubricants production, the company said. Demand for chemicals and lubricants is
expected to outpace that for motor fuel in
Asia
, said
Mike Wirth, Chevron's head of refining operations.
Chevron also is investing in its
California
refineries to run more varieties of crude oil in a push to drive down operating
costs. Its refinery in
Richmond
,
Calif.
, has
started processing crude oil from
North
Dakota
and will use discounted crudes from a variety of
sources, Mr. Wirth said.
"Our bread and butter is optimizing our operations by using different
feedstocks," Mr. Wirth said.
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