The price of oil is at a seven year high and keeps going up. One would think that is great for the oil industry and it is. However, the political climate has changed that want the world to transition to "Green Energy". One of the requirements for the Green transition is higher oil prices so that "Green Energy" is more competitive. The higher oil prices will be used to help the world transition to "Green Energy" faster. Don't necessarily think that higher oil prices will encourage more investment in oil production. It seems counter intuitive for those working in the oil industry, but let's see how many reserves are added in 2022.
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The future is so bright….well you know the rest! SHADES ON!
@4xhi+1eThxvBV you are dreaming. The senate will probably flip, but the result will just be more gridlock. Not too much different than today, as the Democrat's were never able to hold their folks together long enough to pass any fundamental changes. No matter the outcome in November, get ready for another round of more same old same old nothing.
OP here, I hope you are right about November.
OP, just wait until after the 2022 midterms are over. The “Green New Deal” will be over and “Drill Baby, Drill” will be back in vogue. November will be here sooner than you think.
Chevron R&D has been working on long duration battery tech for as long as I can remember. We've also had some in service for a long time at remote locations.
Chevron knows less about batteries than they do about IT!
Chevron's future lays in battery technology and it's actually a good future. The company has long and quietly been a leader in developing long duration battery technology. Think years, not hours. This is where Chevron's bulb burns brighter than all the competition, and brighter than all who are in the dedicated battery business and will supplant Shell, BP, Exxon, etc as the competition.
Many correct opinions here: 1) They haven't admitted it yet, but Chevron's mid- and long-term view is to wind down oil investments. In the short- and mid-term, Exploration and CTC will become nothing but diversity engines (like HR and Finance), with ever-decreasing budgets. Long-term they're gone. 2) Little new investment in existing projects. Expect Anchor and Ballymore to be sold off so we can exit GOM (or go NOJV) within 10 years. 3) Tengiz, Permian, and Australia will provide cash flow for somewhere between 10-20 years. 4) High-risk gamble on transitioning to being an energy company rather than an oil company. Odds are the best outcome is that Chevron becomes a much smaller petrochemical company, runs wind turbine farms in GOM, West Texas, and Australia, or becomes a 'world class' solar panel company. Petrotechs, it's highly unlikely you're going to end your career doing anything remotely similar to what you do today. Geologists go back to being a university curiosity, geophysicists go back to predicting earthquakes.
more likely to depend on Suppy&Trading to bring in the profits which are closer to a billion
Who cares?
Has anybody noticed, BP now has smalle market cap than COP
“ Oil production will continue to increase and be profitable.
Just not in first world countries.”
Very well put!
What I keep thinking is that power moves back to Middle East countries in the latter half of this decade. If they stick together and don’t over produce, they can still get a good price for their oil (say $60+) for a long time, even if global consumption is in decline.
Oil production will continue to increase and be profitable.
Just not in first world countries.
Here’s MW’s plan:
- Use Permian and Tengiz to maintain production for next 3-4 years
- squeeze every other BU, minimal investment
- maintain investor returns and balance sheet strength
- unlikely CVX’s green investments will pan out so make a major acquisition in 3-4 years
Remember MW loves consultants and finance and doesn’t trust CVX upstream engineering
Chevron has always tended to overstaff NOJV without adding value. Our NOJV staff are typically passive, reactive and passing through info rather than influencing. They take credit for success but blame the operator for failure.
Yes worrying that I see nothing in the pipe, and unconventionals are just a stop gab that will be in decline shortly and gone in under a decade. What’s the plan: burn the deck boards to feed the dividend and then sell the ship for scape?
Very true on the NOJV in the GOM, Chevron is now Shells finance company.
Whale 40%
Leopard 50%
I think the MBA’s call this as “asset light” :-)
Chevron has made the decision to be non operator going forward. They will still invest in fields but at ~40% and not operate it. Staff levels will be reduced to bare minimum except for those to keep the lights on. This could be seen when they slashed technical staff by 35%. They will not replace technical staff and they will not promote staff unless your a HiPo. Look at everything overseas except for gorgon, there is no future. Look at GOM, blind faith is done, Tahiti is on production decrease, JSM is about to wrap up. Anchor has a total of 7 wells and ballymore has 3. Wow we have 10 wells for the future, what’s after that……….nothing absolutely nothing. So we have west Texas which is the factory model, AI is great at factory models. So we don’t need many people for AI to tell you what to do.
Companies will minimize spending to max earnings/cash flow/returns in these final years of the industry. It's like a producing asset at the end of life. Keep it running as safely and profitably as possible while stripping opex to the bare minimum.
This is the last oil ride! Enjoy!
Until folks start riding horses to work the oil industry will be in trouble
Continued under-investment in reserves replacement will be great for the industry short term, as societies count their green chicken before they hatch. Longer term oil is on the way out, but by that I refer to decades not years from now. Enjoy the ride while you can!