“We’re running the Permian to deliver strong free cash flow right now. We could hit the gas and begin to grow it again but I don’t know what the future looks like.”
Add Mike Wirth to the list of oil-and-gas leaders not (yet) willing to commit to substantially ramping up production even though the Iran war has disrupted supplies and pushed up the price of barrel of West Texas Intermediate 50% since end-February.
The chairman and chief executive officer of Chevron Corp., Houston, said his team’s focus—in the Permian basin specifically as well as across the company’s global portfolio—is on capital efficiency and operating efficiency. Those priorities have Chevron on course to hit its 2026 production growth target of 7-10% and the conflict in the Middle East is still creating too much uncertainty to change course.
“You could build a scenario where things get resolved quickly, the Strait [Hormuz] reopens, and we get back into a market that’s pretty well supplied. You can build another scenario that says this goes on and the market’s tighter and it looks different on the other side,” Wirth said on a May 1 conference call with analysts and investors. “I don’t know exactly how this will play out. We’re not going to make any rash or immediate changes.”
Chevron’s assets in the Permian basin produced 1.03 MMboe/d in the first 3 months of this year, the fifth consecutive quarter that production in the basin has topped 1 MMboe/d. Wirth said the company is running those operations “to deliver strong free cash flow” and preserve reliability gains it has made of late.
Steady production, shareholder value
“A shift to quickly turn to more production growth might dilute that focus,” Wirth added. “For now, I think it’s really steady as she goes.”
Wirth’s comments about taking time before committing to major production plan changes struck the same tone as those of Ryan Lance, his peer at ConocoPhillips. Lance and his team said on Apr. 30 that they’re adding some capital to their 2026 Permian basin plans but were emphatic in saying they’re looking only to maintain their production pace into 2027 and not making a major call based on higher oil prices.
Analysts at Macquarie said recently that capital discipline and shareholder returns are likely to the preferred path among publicly traded operators in the near future. Any supply increase, they wrote, is likely to remain gradual, particularly if prices stay about $70/bbl.
Wirth said Chevron is taking a similarly cautious stance to its Venezuela assets, where it is still focused on generating cash to lighten its debts. He noted that “there are indicators of positive development in the country but there’s still questions” around taxes, royalties and dispute resolutions.
Chevron’s production totaled nearly 3.86 MMboe/d in the first quarter, an increase from 3.35 million early last year (thanks in large part to the acquisition of the former Hess Corp.) but down nearly 5% from the fourth quarter, with downtime at the Tengizchevroil joint venture in Kazakhstan the main contributor. Total US production topped 2 MMboe/d for the third consecutive quarter.
That output translated into net income of $2.2 billion on revenues of more than $48.6 billion compared with $3.5 billion and $47.6 billion, respectively, in early 2025. Increases in operating expenses and higher depreciation, depletion and amortization were the primary factors in the drop in profitability.
Shares of Chevron (Ticker: CVX) were down more than 1% to roughly $191 in afternoon trading on May 1. Over the past 6 months, they are still up 20%, a move that has grown the company’s market value to $380 billion.
About the Author
Geert De Lombaerde
Senior Editor
A native of Belgium, Geert De Lombaerde has more than two decades of business journalism experience and writes about markets and economic trends for Endeavor Business Media publications Healthcare Innovation, IndustryWeek, FleetOwner, Oil & Gas Journal and T&D World. With a degree in journalism from the University of Missouri, he began his reporting career at the Business Courier in Cincinnati and later was managing editor and editor of the Nashville Business Journal. Most recently, he oversaw the online and print products of the Nashville Post and reported primarily on Middle Tennessee’s finance sector as well as many of its publicly traded companies.