The CEO of Chevron touted the company’s Texas growth – from the Permian Basin to Houston refining and chemicals – and urged the energy sector to take the lead on emissions reductions to help combat climate change.
Speaking at the Greater Houston Partnership’s annual “State of Energy” luncheon, Chevron Chief Executive Mike Wirth praised the Houston area as a place to do business and grow.
“I think this area will be the center of the energy universe for a long time to come,” Wirth said.
Chevron just recently bought the Pasadena Refinery in the region, continues to expand its petrochemical footprint in Baytown and Sweeny through its Chevron Phillips Chemical joint venture, and keeps growing offshore in the deepwater Gulf of Mexico.
Another major area of growth is in the booming Permian Basin in West Texas and southeastern New Mexico.
Noting that Chevron was criticized a few years ago for moving slowly in the Permian on its large legacy acreage, Wirth said that was by design.
“What is in our wheelhouse is methodically planning and executing,” he said, and doing “factory drilling – the same thing over and over again.”
Chevron has emerged as the second-largest producer in the Permian. Chevron would have claimed the top spot this year if it had won the bidding against Houston’s Occidental Petroleum to buy The Woodlands-based Anadarko Petroleum.
Instead, Oxy paid $38 billion for the honor and Chevron walked away with a $1 billion breakup fee from Anadarko.
Rival Exxon Mobil is by far the most active driller in the Permian and quickly playing catch up.
Wirth also noted that Chevron took it slow in the Permian in part so it could have all the pipeline hookups in place to reduce emissions and flaring – the burning off of associated natural gas collected during oil production.
Chevron in recent years already has reduced its flaring of methane from natural gas production from about 4 percent down to less than 1 percent – better than industry averages in the region.
“The industry should be out and in front on this,” Wirth said about reducing emissions in the industry.
While Chevron is doing well in the Permian, he acknowledged the California energy major must improve its emissions reductions in some of the more remote parts of the world.
Chevron last week said it will adopt new goals to reduce its greenhouse gas emissions from its oil and gas production by 2023.
Chevron aims to cut its emissions from crude oil production by 5-to-10 percent and its methane emissions from natural gas production by 2-to-5 percent from 2016 to 2023. The 2016 start date gives Chevron a significant head start on achieving its goals.
Chevron said the new emission goals apply to all of Chevron’s oil and gas production around the world, whether Chevron is the operator of individual projects or not. However, the goals do not apply to emissions further down the supply chain from fuels, petrochemicals and more.