Middle East crisis to have longer-term impact: Chevron CEO

The ongoing Middle East crisis will likely change the global energy system in the longer term, given the significant disruption it continues to cause in the commodities market, Chevron CEO Mike Wirth said May 1.

"It's early to have firm conclusions about how the energy system will change in the long term," Wirth said on the company's first-quarter earnings webcast. "I do think there will be changes. We have to see how things play out over the coming weeks, hopefully, not longer than that. As this comes to some sort of a resolution, and the energy system begins to be reconstituted in a way that can reach some new equilibrium."

"I think that the new equilibrium will look different than what we've known before. But I'm not sure I could argue with a lot of confidence that I could describe exactly what that looks like," he said.

Chevron, along with ExxonMobil and ConocoPhillips., is among the leading US companies with existing assets in the Middle East that have been impacted both directly and indirectly by the current crisis.

A common line among the trio of US producers is that, while there is no early solution visible on the horizon, the companies will maintain a policy of focusing on other short-cycle, high-return assets elsewhere globally while awaiting clarity on energy prices.

For ConocoPhillips, focus will be on its South Texas' Permian Basin and Alaska assets as it awaits a price equilibrium, CEO Ryan Lance said on the company's earnings webcast April 30, while in 2026, ExxonMobil will remain focused on growing output in 2026 from its advantaged assets in the Permian Basin and offshore Guyana, as the industry navigates the current market disruption, CEO Darren Woods said May 1 on its earnings webcast.

Invest in competitive assets

"One thing you can expect from us [Chevron] is consistency. You will see capital and cost discipline no matter what. You will see us invest in highly competitive assets with scale and longevity, and assets that are low on the cost curve," Wirth said, pointing out the expectation for Chevron will be to invest to drive strong returns and free cash flow while maintaining a strong balance sheet.

"We've got great visibility through 2030, and we've got assets online now that deliver predictable visible cash flow growth for the balance of this decade. And we've got a full hopper for beyond that," Wirth said, pointing out Chevron is keeping options open to "fine-tune" its stance once there is a resolution to the Middle East crisis and "see what the energy system begins to look like."

His statements came after Chevron reported total US first-quarter production of 2.024 million b/d of oil equivalent, compared with 1.636 million boe/d in the same quarter the prior year, the company said in its earnings release.

Last quarter, total liquids (crude oil and NGL) US production was 1.461 million b/d, compared with 1.159 million b/d, with the increase primarily due to the acquisition of Hess, higher production in the Gulf of Mexico following project start-ups, and growth in the Permian Basin, it said.

Chevron is maintaining its 2026 budget at $18 billion to $19 billion, while targeting a 7% to 10% growth in the current year, CFO Eimear Bonner said on the same webcast.

'Big pistons in the engine'

"With TCO greater than 1 million b/d, Permian solidly above 1 million b/d, and the Australian LNG facilities running at full capacity, along with the Gulf of America, all the big pistons in the engine are firing. And as we come into the second quarter, we've got tremendous momentum across the system. Production in the second quarter is expected to be higher than production in the first quarter," Wirth said.

Chevron is a joint venture partner in TCO, which operates the Tengiz oil field in Kazakhstan, while it also has an equity interest in the Gorgon LNG project in Australia.

Lastly, Chevron has over 2 million net acres of land positions in both the Midland and Delaware plays in the Permian Basin, in Texas and New Mexico, and utilizes cutting-edge technology to maximize recoveries while reducing development and completion costs.