Chevron’s Upstream production
Chevron’s (CVX) Upstream portfolio is expanding to achieve its targeted production growth. Chevron expects its total volumes to grow between 4% and 7% in 2019. The Gorgon, Wheatstone, and Permian projects are expected to drive the company’s growth.
Going forward, the company also has other Upstream assets that could add to its production, including conventional oil and gas assets in Kazakhstan (Tengiz, TCO), deepwater assets in the Gulf of Mexico, and emerging shale assets in Argentina (Loma Campana), Canada (Duvernay), and Appalachia (Marcellus/Utica).
Permian’s growth potential
The Permian Basin’s contribution to Chevron’s total production has been rising. In the first quarter, Chevron’s Permian production rose 55% YoY to 391 Mboepd (thousand barrels of oil equivalent per day). Chevron expects its production in the region to grow to ~900 Mboepd by 2023.
Chevron’s resources in the Permian Basin grew by 6.9 Bboe (billion barrels of oil equivalent) over 2017 to 16.2 Bboe in 2019. The company holds 2.2 million net acres in the Permian Basin, more than 80% of which have no or low royalties. It should come as no surprise that the company plans to incur $3.6 billion in capex in the Permian Basin in 2019.
Gorgon and Wheatstone
Chevron’s massive and capital-intensive gas projects in Australia, Gorgon, and Wheatstone have now started yielding results. In the fourth quarter of 2018, Gorgon’s and Wheatstone’s combined net production stood at ~400 Mboepd. However, in the first quarter, Gorgon’s production was affected by unplanned downtime.
Performance in the first quarter
Chevron’s Upstream production grew by 7% YoY to 3.04 MMboepd (million barrels of oil equivalent per day) in the first quarter. This increase in production was due to a rise in output in the Wheatstone and Permian regions.