Chevron Corp. 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.