Reuters: Chevron pivots to Permian shale, away from mega-projects

|About: Chevron Corporation (CVX)|By:, SA News Editor

Chevron (CVX +1.2%) CEO John Watson tells Reuters that the company is hitting the accelerator on developing its vast holdings in the Permian Basin.

The CEO says CVX is shelving plans for any new multi-billion dollar mega-projects, for the next few years at least, and is turning to acreage it has always controlled and that largely is free of royalties to landowners.

Watson bristles at critics who say CVX is moving too slowly in the Permian, saying the company's Permian production should grow by 8x to more than 700K bbl/day of oil.

CVX is boosting spending in the Permian by 67% this year to $2.5B, making it the company's second biggest area for spending this year after the Tengiz project in Kazakhstan, which is not expect to come online until the next decade.

Watson also says there is no sign of peak demand for oil and is not worried about demand hitting a ceiling for at least the next 20 years, as rising petroleum needs for air travel and petrochemical production should buffer any potential drop in demand from the automobile sector.