Chevron Corp. is bullish on oil and gas prices, according to chief financial officer John Watson, who spoke recently to Wall Street oil analysts and investors. "Our plan going forward is based on $20 or so [oil]. That's the way we're doing our capital budgets." Watson calls the figure "moderate," yet it is higher than some other big oils' $12- to $15-per-barrel budgets. "There has always been a high correlation between economic activity, economic growth and demand for hydrocarbons," Watson says. "When people plug in their computers, they need power, and that's going to come from hydrocarbons or some other form of energy that we can participate in." The major, which hopes to merge with Texaco Inc. next year, reported third-quarter operating earnings of more than $1.6 billion. "There's a tendency to attribute all the improvement to commodity prices. Another way to look at it is that this is our reward," Watson says. "Chevron has been investing heavily in the upstream side of the business for the last five to 10 years. We were once more of a downstream company. We had the highest return on capital employed of all our competitors and that's because of our portfolio and where we're invested."
Recommended Reading
Future Permian Gas Pipeline May Have a Difficult Route to Follow
2024-05-22 - Kinetik Midstream’s CEO Jamie Welch sees more expensive and longer pipeline paths causing complications for midstream companies.
Exxon's Joliet Refinery Units Down for a Week, Plans for Restart in Late July, IIR Says
2024-07-17 - A severe storm passed through Joliet earlier this week, leaving thousands without power.
AltaGas, Royal Vopak Reach FID on LPG Exporting Facility in Canada
2024-05-30 - The energy exporting facility will be developed on Ridley Island, British Colombia, on a 190-acre site adjacent to AltaGas and Vopak’s existing propane exporting terminal.
Markman: Pre-season Jitters in the Hurricane Zone
2024-06-05 - If hurricane predictions are correct, oil and gas fortunes could be in hot water.
CoolCo, GAIL Enter Long-term LNG Agreement
2024-05-16 - CoolCo and GAIL’s agreement is intended to secure long-term LNG supply in India’s market, with GAIL having an option to extend the 14-year agreement by another two years.