Chevron to Boost Production to 2.79MM Bopd

NEW YORK (Dow Jones Newswires), March 14, 2011

Chevron said it plans to increase drilling for unconventional gas and oil reserves in the U.S. and elsewhere and that it plans to raise total production 1% this year.

In a slide presentation prepared for its analyst meeting here, Chevron said that it plans to start drilling this year for shale gas in Poland and Canada, where the company recently acquired large acreage positions. The oil giant also said it plans to drill this year 70 wells in the Marcellus Shale, a giant rock formation underlying Pennsylvania, New York and other states that has become a prolific source of natural gas in the U.S. The company gained access to the area after it acquired natural gas producer Atlas Energy last month.

Chevron, the second-largest U.S. oil company by market value, also said it's planning to drill its first deepwater wells in Liberia and China this year.

The company confirmed it plans to have a 2011 capital expenditure budget of $26 billion, with 35% expected to be invested in the Americas, 35% in Asia, 20% in Africa and 10% in Europe, Eurasia and the Middle East.

Chevron said its production in 2011 is expected to be 2.790 million barrels of oil equivalent per day, up from 2.763 Mboe/d in 2010.

Citing an "overhang of surplus capacity" and tepid global demand, Michael Wirth, Chevron's chief of downstream operations, said during the presenation that weak margins are likely to persist, with the impact felt the sharpest in developed markets.

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