Chevron’s upstream production
Chevron (CVX) has upstream assets around the globe. CVX expects its production volumes to grow 4%–7% YoY (year-over-year) this year. In the first quarter, Chevron’s worldwide production rose 6.6% to 2.9 MMboepd (million barrel of oil equivalent per day). In comparison, in the first quarter, ExxonMobil (XOM) produced 3.9 MMboepd, and Royal Dutch Shell (RDS.A) and BP (BP) produced 3.8 MMboepd and 2.6 MMboepd, respectively.
CVX expects its worldwide upstream assets to drive production growth. These assets include its Australian portfolio (including Gorgon and Wheatstone), conventional oil and gas assets in Kazakhstan (such as Tengiz and TCO), shale and tight assets in the Permian Basin, and deep-water assets in the US Gulf of Mexico.
In the first quarter, Gorgon’s net production was 202 Mboed (thousand barrels of oil equivalent per day), while Wheatstone’s net production was 67 Mboed. Wheatstone’s Train 2 is expected to start up in the second quarter. Chevron is focusing on debottlenecking and driving optimum facility utilization to ramp up production in the region.
At Tengiz, Chevron is on track to deliver the first production from its WPM (wellhead pressure management) and FG (future growth) projects in 2022. FG projects are expected to add 260 Mboed of capacity, and WPM is expected to partially offset decline.
Likewise, in the Permian Basin, Chevron’s production rose 100 Mboed YoY to 252 Mboed in the first quarter. Chevron expects its production to rise over 600 Mboed by 2022 in the region.
Chevron’s exploration focus
The US Gulf of Mexico is Chevron’s exploration focus area. The company has been successfully lowering its operating costs in the region through standardization and efficiency. For instance, in its Jack and St. Malo project, CVX reduced unit operating costs by 50% and completion time by 40% from 2014. Other projects in the region, such as Tahiti and Blind Faith, have used installed infrastructure and technology to provide exceptional results. Recent discoveries, such as Ballymore and Whale, offer further opportunities to leverage existing set-ups in the region.
Chevron has a series of projects under development worldwide to boost production growth, and it has a large proven reserve base of 11.7 billion barrels of oil equivalent. These reserves could continue to fuel Chevron’s robust project pipeline to deliver long-term growth. With production growth in place, rising oil prices could support Chevron’s upstream earnings in the near future.