Chevron plans to increase its production by a fifth by 2017 thanks to large projects in Australia that should begin to deliver gas to Asia in two years while the company continues to explore for shale gas in China and Poland.
The second largest U.S. oil company said that in the Marcellus reservoir stocks are exceeding expectations, but said it is investing in this project at a moderate to weak fluid prices in North America.
George Kirkland, executive vice president for exploration and production business and for the gas, said the company expects strong demand for liquefied natural gas (LNG) from Australia. “LNG is a replacement for energy from coal, or oil or nuclear power and do not really have direct competition with other forms of gas, out of another source of LNG,” Kirkland said in a meeting with analysts in New York.
“Each of these markets is different,” he said.
A new LNG project in Angola with a capacity of 175,000 barrels of oil equivalent per day should start shipping next quarter. Although contracts with the government of that country are not yet closed, Chevron expects that gas is exported to Europe and Asia.
The company has found new sources in other countries onshore gas, which are open to new drilling techniques and hydraulic fracturing. In Poland, Chevron opened a second shale gas well and also started one in China, where he is exploring 940,000 acres (about 380,000 hectares) with Sinopec.
His rival Exxon Mobil Corp raised questions about the potential of shale gas in Poland, where his first two wells did not produce commercially viable volumes. Chevron has set a production target of 3.3 million barrels per day by 2017, with an assumption of $ 79 per barrel, exceeding its forecast of 2.68 million barrels per day this year.
The start of projects that require large investments will enable the company to lower the cash on its balance sheet, Chevron said, at a time when analysts look for clues of increased dividends.
Chevron said it plans to keep its refineries on the West Coast even though others are leaving the business, as its rival BP Plc, which has put up for sale its refinery in southern California. Shares of Chevron rose 0.47 percent to $ 110.52 and were less than a dollar that reached a maximum in January.