HOUSTON—Energy markets faced extreme volatility during the first year of Russia’s invasion of Ukraine, but the war will have long-lasting effects on natural gas markets, in particular, Chevron Corp. Chairman and CEO Mike Wirth on March 6.
“Gas markets, I think, are structurally changed for the longest,” Wirth said during an onstage discussion at CERAWeek by S&P Global. “I don’t think Europeans intend to go back to their reliance on Russian gas.”
Wirth also said Chevron still intends to hit its ambitious Permian Basin production goals but acknowledged that supplies and labor challenges remain a challenge.
Competition between European and Asian buyers for liquefied natural gas in the past year and new LNG export projects coming online in the U.S. also have wide-reaching impacts on global gas markets, he said.
“It changes trade flows, it changes pricing mechanisms, it changes product economics globally,” Wirth said.
As European nations search for reliable, long-term gas supply, gas resources in the eastern Mediterranean, including Chevron’s footprint in the Leviathan gas field offshore of Israel, could grow in importance, Wirth said.
The Leviathan Field could serve as a major gas resource for Europe, but investment in new infrastructure will be needed to transport gas from the eastern Mediterranean to European markets.
RELATED
Cyprus, Chevron Press Ahead with Offshore Gas Field Development
The global oil markets have also seen its price structure change since Russia’s war in Ukraine started last year. But as Russian crude continues to find its way to buyers, oil markets have been impacted less drastically than gas markets, Wirth said.
Markets for refined products should also come back into a more balanced equilibrium this year, he said.
Permian conditions are ‘challenging’
Domestically, Wirth reiterated Chevron’s goals to scale oil and gas production in the Permian Basin up to 1 MMboe/d by 2025. Last year, Chevron’s average production in the Permian was over 700,000 boe/d.
RELATED
Chevron Reiterates Permian’s 2025 Growth Target Despite Delaware ‘Falling Short’
However, rampant inflation and supply chain constraints continue to present issues to oil and gas operators in the Permian, Wirth said.
“Access to both equipment and people is challenging, but we’re progressing our plan,” Wirth said.
Recommended Reading
Nabors SPAC, e2Companies $1B Merger to Take On-Site Powergen Public
2025-02-12 - Nabors Industries’ blank check company will merge with e2Companies at a time when oilfield service companies are increasingly seeking on-site power solutions for E&Ps in the oil patch.
Shell, Canadian Natural Resources to Swap Oil Sands, CCS Interests
2025-01-30 - In a swap transaction, Canadian Natural Resources Ltd. will own 100% interest in the Athabasca Oil Sands Project after acquiring a 10% interest from Shell Canada Ltd. in exchange for a 10% interest in carbon capture and storage facilities.
Elliott Demands Phillips 66 Sell or Spin Off Midstream Biz for $40B+
2025-02-12 - Activist investor Elliott Capital Management disclosed Feb. 11 it has built a $2.5 billion position in Phillips 66 and issued a series of initiatives, including the sale or spinning off of the company’s midstream assets.
Minerals M&A to Heat Up in ‘25 with $4B Diamondback Sale–KeyBanc
2025-01-21 - KeyBanc analysts expect an “imminent” Diamondback Energy dropdown to Viper Energy and at least a couple of $500 million deals by public mineral and royalty companies in 2025, with Sitio Royalties a likely acquirer.
Atlas Energy Solutions to Acquire OFS Power Company Moser for $220MM
2025-01-27 - Atlas Energy Solutions said it will purchase Moser Energy Systems in a cash-and-stock deal that adds power services in the company’s core Permian Basin operating area.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.