Chevron entry to Guyana oilfields solves company’s top challenge
By Sheila Dang
Houston (Reuters) -Chevron’s entrance to Guyana’s rich open sea oil fields solves one of the biggest problems that cause the US Major: its growth will come beyond the next few years.
On Friday, the US oil manufacturer has closed the purchase of 55 billion dollars of Hess – between the largest oil and gas agreements so far – and won the second share of Guyana’s stabroek block after reigning in a legal struggle against the larger rival Exxon Mobil.
Before the agreement was closed, concerns about Chevron’s finance and production growth expectations were increasing, and oil and gas reserves fell to the lowest level in at least ten years.
The Stabroek block holds at least 11 billion barrels of oil equivalent and has been one of the most important oil discoveries for decades.
The Chevron CEO Mike Wirth, about closing Hess purchase, “The combination improves our growth profile well and expands to the next ten years.” He said.
Some investors applauded the development by increasing the company’s long -term expectations.
According to LSEG data, David Byrns, the portfolio manager of American Century Investments, adds a free cash flow hole that Chevron approached the 2030s at the end of this decade. ” He said.
Without HESS, it was unclear how Chevron could maintain free cash flow, he said that the purchase was expected to help Chevron to continue his dividends in the 2030s.
Stocks are falling
After a few difficult months when closing, global dismissal, increasing security problems and lost exports from Venezuela, Chevron is a very needed win. Last year, stocks fell 7.5%. On Friday, they fell by 2% in noon trade.
Chevron’s oil and gas reserves or potentially the amount of oil and gas areas fell to 9.8 billion Boe, the lowest point of at least ten years at the end of 2024.
Compared to the amount it produced to the reserves, how much new oil and gas were added and excluding the purchase and sales and sales, the exchange rate was only 45%. The 100 % or more ratio means that the company has changed its reserves as much as it consumes.
In contrast, both the UK -based oil major shell and French oil major totalennerji have an average reserve replacement rate of more than 100%in the last three years.
Gerdes Energy Research President John Gerdes said that after merging with HESS, Chevron production volumes could reach 4.31 million Boe/D in 2030, which was significantly higher than Chevron will produce as an independent company.
