KEY POINTS
- Chevron CEO urges stable U.S. energy policies to support long-term investments.
- Policy shifts, like Chevron’s revoked Venezuela license, disrupt operations.
- The company plans to increase Gulf of Mexico output to 300,000 barrels daily.
Chevron CEO Mike Wirth is calling for a more stable and predictable U.S. energy policy, urging lawmakers to avoid drastic policy swings that create uncertainty in the industry.
Speaking at the CERAWeek energy conference in Houston, Wirth emphasized the need for long-term strategies that ensure stability for energy investments and infrastructure projects.
Over the years, shifting policies have impacted Chevron’s operations, particularly in regions like Venezuela, where the company recently lost a key license due to a policy reversal by the Trump administration.
Wirth explained the energy sector needs long-lasting policies with legislative support rather than short-term executive orders because they might disappear under new leadership.
“We’ve allocated capital that stretches across decades, and we need policies that reflect that timeline,” Wirth said.
“Swinging from one extreme to another isn’t a sustainable approach.”
Policy uncertainty and its impact on Chevron’s global operations
The new United States energy policy directly affects Chevron’s business activities across international locations notably in Venezuela.
Until recently, Chevron had been allowed to operate and export oil from Venezuela under a special license.
The license President Donald Trump canceled resulted in Chevron losing its regional operations.
Wirth identified abrupt changes in government policies as a source of business instability which obstructs companies from planning investments over the long-term period.
Wirth recommended that the U.S. government needs to establish steady regulations which maintain stability across each presidential transition.
He also highlighted permitting delays as another key challenge, pointing out that securing approvals for major energy projects often takes years due to bureaucratic red tape.
“We need to see some of this in legislation so it’s more durable and not at risk of being swung back in another direction by a future administration,” he added.
Chevron growth plan in the Gulf and Permian Basin
Chevron advances its focus on production growth in Gulf of Mexico and Permian Basin areas despite encountering obstacles.
Wirth confirmed that the company plans to boost oil output in the Gulf to 300,000 barrels per day over the next few years, up from 200,000 barrels per day last year.
In the Permian Basin, which is one of the largest oil-producing regions in the U.S., Chevron expects production to reach 1 million barrels per day in the near future.
Once that milestone is achieved, Wirth stated that the company will maintain a steady production rate rather than aggressively expanding further.
The priority of operations will evolve into the production of free cash flow instead of production growth.
Wirth views Asian markets favorably for investment purposes because Asian economies have shown more promising growth than European markets.
According to Reuters, he believes Asia will play a critical role in shaping the future of global energy demand.
Wirth maintains his belief that the industry needs stable long-term policies to achieve market stability amid changing market conditions and policy adjustments.
“We need policies that allow companies to plan, invest, and grow without constant regulatory uncertainty,” he reiterated.
