Chevron Raises Exploration Spending By 50%
Chevron Profits Nearly Triple to $9.9 Billion Norway could hold significant undiscovered… What I Cover Tsvetana Paraskova is an energy and commodities journalist who has contributed to Oilprice.com for nearly a decade, covering global energy markets, commodities,… After years of focusing on growing exploration and production in the U.S.
Gulf of Mexico and the Permian shale basin, U.S.
oil and gas supermajor Chevron returns to high-impact frontier exploration as it seeks to renew its portfolio with diverse opportunities globally.
Exploration in South America, Africa, and the Eastern Mediterranean is now a key focus of Chevron’s upstream business, which the company looks to turn around by adding reserves and production growth opportunities in Guyana, Angola, Namibia, Nigeria, Guinea-Bissau, Equatorial Guinea, Egypt, and the Eastern Mediterranean.
supermajor is boosting its exploration spending in its revived exploration program, led by vice president of exploration, Kevin McLachlan, who took over the exploration arm last year.
Chevron recruited McLachlan from France’s TotalEnergies, where earlier this decade the executive oversaw work at one of the biggest and most promising recent discoveries in a frontier area—the Venus discovery in Namibia’s offshore Orange Basin.
Chevron has been aggressively adding exploration acreage over the past two years.
This strategy to turn to frontier exploration has been vindicated by this year’s geopolitical and energy market turmoil.
The Iran war and the disruption of oil and gas flows in the Strait of Hormuz laid bare the vulnerability of relying on a single region for large supplies while global oil demand is set to grow in the coming years.Related: Japan to Overtake China As World’s Top LNG Importer This Year Supermajors need to add to their reserves base to offset declines at existing assets over time.
At the same time, “the Middle East conflict has highlighted the concentration risk involved in focusing on geopolitically unstable regions,” analysts at Wood Mackenziesaidearlier this year.
“The need for portfolio renewal and diversification is raising upstream firms’ appetite for exploration risk,” they added, noting that oil and gas companies are taking on more exposure and positioning earlier in their respective exploration targets.
Exploration budgets have room to rise, especially in light of the windfall profits companies are raking in this year amid the spike in oil and gas prices following the Iran war.
| Product | Price | Change |
|---|---|---|
| Brent Crude | $102.14/bbl | +0.34% |
| WTI Crude | $96.90/bbl | +0.21% |
| EN590 Diesel | $846/MT | +0.18% |
| Jet Fuel A-1 | $1090/MT | +0.55% |
| Mazut M100 | $450/MT | -0.15% |
| Bitumen 60/70 | $470/MT | +0.08% |
| Sulphur Gran 99.5% | $470/MT | -0.44% |
| Urea 46% Gran | $650/MT | +1.12% |
| NPK 16-16-16 | $460/MT | -0.28% |
| Nat Gas TTF | $15.42/MMBtu | +0.92% |
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