(Reuters) – Chevron is positioned to increase its free cash flow by $6 billion to $8 billion by next year, and reduce expenses by “a couple billion dollars,” said Chevron CEO Michael Wirth on Wednesday.
The No. 2 U.S. oil producer expects results to benefit from the start of new or expanded oil production projects in Kazakhstan, U.S. shale and the offshore U.S. Gulf of Mexico. Oil production in the Gulf of Mexico will grow to 300,000 barrels per day by 2026, up from 200,000 last year, Wirth said in remarks at the Goldman Sachs Energy, CleanTech & Utilities Conference in Miami.
In August, Chevron produced its first oil from a pioneering U.S. Gulf of Mexico deepwater field under extreme pressures. At its peak, the project will pump up to 75,000 barrels of oil per day and the company has two other offshore projects that will follow.
The global liquefied natural gas market could be slightly oversupplied in the back half of this decade, he also said on Wednesday.
Wirth said the U.S. could see a build-out of natural gas power generation plants to support energy demand from the growing number of data centers for artificial intelligence, which will likely come before the growth of nuclear energy.
“Nuclear is probably a decade away from most of the people I talk to that are working on those technologies… so the good news is America is blessed with an abundance of natural gas,” Wirth said.
Chevron is prepared for a “prompt close” later this year of its $53 billion deal to acquire oil producer Hess Corp, Wirth said. The merger has been approved by shareholders and U.S. regulators, but stalled by a contract arbitration challenge by Exxon Mobil and CNOOC, Hess’ partners in a Guyana oil production joint venture. “We continue to be very confident in Hess’ position in the arbitration and we feel like they clearly have the right side of this argument,” Wirth said.
Reporting by Sheila Dang in Houston, Editing by Nick Zieminski
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