A Review of the Nigerian Energy Industry

Chevron reaffirms strategies, highlights future growth

WATSON, CHAIRMAN AND CEO OF CHEVRON CORPORATION, SPEAKS AT THE COUNCIL ON FOREIGN RELATIONS IN NEW YORKChuks Isiwu 11 March 2013, Sweetcrude, Lagos – US oil giant Chevron Corporation says it is committed to generating industry-leading operational and financial results and advancing key projects to drive future growth.

Project ramp-ups and major capital projects, which begin starting up later this year, combined with profitable production growth from shale and tight resource developments, will add over 800,000 barrels of oil equivalent per day to Chevron’s overall production by 2017, its top executives said, Tuesday at the company’s annual security analyst meeting in New York.

“World energy demand continues to grow and the outlook for the energy business remains excellent,” said John Watson , Chevron’s chairman and CEO.

A statement by the company released in New York quoted Watson as adding: “Our strategies are sound, and we’re poised to deliver significant production growth through the end of the decade. We believe this compelling growth profile, combined with flattening capital spending levels these next few years, should serve as a strong catalyst for value creation for our shareholders in the years ahead.”

According to the statement, George Kirkland, vice chairman and executive vice president, Upstream, reviewed the performance of Chevron’s upstream business in 2013, year where the company again led the industry on multiple upstream financial metrics, including earnings and cash unit margins, as well as return on capital employed.

“Our upstream portfolio leads the industry in quality, breadth and depth. We have the right strategies, always adhere to a disciplined investment approach, and are constantly managing the portfolio to extract and maximise value for our shareholders.

“Our base business is performing exceptionally well and provides us a substantial, longer-term competitive advantage, driving continued peer-leading financial and operational performance,” he said.

Jay Johnson , senior vice president, Upstream, provided an overview of Chevron’s queue of projects, exploration assets, and other long-term opportunities. “Our plan for production growth is solid and will be driven by near-term project ramp-ups as well as our larger major capital projects which begin starting up later this year.” Johnson said.

“These projects are attractive, and when combined with profitable production growth from our shale and tight resource developments, are expected to add over 800,000 barrels of oil equivalent per day by 2017. We also have a deep queue of other growth opportunities which should allow us to continue growing production to the end of the decade,” he added.

Mike Wirth , executive vice president, Downstream and Chemicals, reviewed market fundamentals while highlighting business performance and future growth plans. He said: “Our strategy is to deliver competitive returns and grow earnings, including integration opportunities with our upstream business.

“We have a focused refining and marketing portfolio with strategically located and competitive assets. Our petrochemicals business leads its industry, and we continue to target profitable growth opportunities, primarily in chemicals and lubricants.”

Pat Yarrington , vice president and chief financial officer, highlighted Chevron’s continued financial strength, capital spending outlook, and asset divestment plans. “Our objective is to reward our shareholders through both share price appreciation and higher dividends. We’ve been able to sustain increasing shareholder distributions and, at the same time, reinvest for future growth. We believe we’ve balanced these objectives well, and that our existing portfolio and new investment projects will support continued value growth for our shareholders,” Yarrington said.


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