Chevron wary of 'restrictive' US policies as new opportunities beckon

Chevron could sharpen its focus on a raft of international projects if conditions for new investments in the US become untenable, CEO Mike Wirth said on Friday. 

The comments came after Chevron reported a 2020 full-year loss of US$5.5bn – compared to a US$2.9bn profit in 2019 – as the coronavirus pandemic crippled global energy demand.

The oil sector slump coincides with growing industry concern about the policies of new US President Joe Biden. On Wednesday, Biden issued an executive order that suspends new oil and gas leases on federal land, a move some observers believe points to a less favorable investment climate.

"We've got options out of the US," Wirth said during an earnings call on Friday. "If conditions in the US become so onerous that it really creates a disincentive [for investment] we can look [elsewhere]."

Chief financial officer Pierre Breber added: “We don’t agree that it’s good policy to be overly restrictive on federal lands. If it continues we think that will push energy production outside the country.”

Chevron's Latin American asset portfolio includes upstream projects in Venezuela, Argentina, Brazil, Mexico and Suriname. The California-based company also secured operating stakes in the Colombia-3 and Guajira Off-3 blocks off Colombia's Caribbean coast as part of its US$5bn acquisition of Noble Energy last year.

Wirth said that despite political and economic uncertainty, Chevron is well-positioned to emerge from the downturn "even stronger" than before, citing the company's ability to remain profitable with oil at US$40/b. 

And he said the firm is committed to reducing its carbon footprint by prioritizing natural gas while exploring new carbon capture and hydrogen opportunities. 

“The current energy system is not the enemy,” Wirth said. “Emissions are what we should focus on.”