Uche Cecil Izuora
Chevron Corp., Houston, has sustained production from producing assets and successfully grew its upstream production around the world by 5 per cent in the second quarter compared with early this year.
The growth included record performance from the Permian basin even as the company devoted less capital to those operations.
Second-quarter net profits at Chevron ballooned to $12.1 billion from $2.2 billion in 2026’s first three months.
The growth was supported by higher production (including from Hess assets acquired last year), which totaled nearly 4.1 MMboe/d. But the bigger drivers of that earnings growth were average selling prices that were substantially higher than in the first quarter and in the same period of last year as well as a strong performance from the company’s refineries and international production growth.
Despite those tailwinds persisting, albeit less forcefully in the case of oil prices, chairman and chief executive officer Mike Wirth said his team will stick to its knitting and focus on cost control and the long-term picture which includes a handful of exploration projects around the world rather than significantly ramping production.
“We’ve got assets that we’re working at plateau to generate free cash flow, which is the lesson I think that the industry learned over the prior decade when it generated no free cash flow, essentially, and all the cash went back into growth,” Wirth said on a July 31 conference call with analysts. “At the scale that we operate at now, we could grow these assets further, particularly in the Permian if we chose. We are working for efficiency [and] productivity and to generate free cash out of them.”
Chevron’s shale and tight portfolio now produces about 1.7 million b/d, with the Permian accounting for more than 1 million b/d of that figure and the Denver-Julesburg basin producing about 400,000 b/d. Wirth and his team said capex in the Permian will be about $3.5 billion this year, which amounts to 25 per cent less spending per barrel of oil equivalent compared to 2025.
Wirth’s comments prioritizing cash flow over production growth echoed his general view from three months ago.
He and chief financial officer Eimear Bonner also showcased Chevron’s continued progress on cutting billions in costs, be it at the acquired Hess assets, through general streamlining or via efficiencies in the field.
“There’s a lot of new initiatives, including optimizing artificial lift, real-time facility optimization, a new approach to ops and maintenance through an asset-tiering lens,” Bonner said of work under way in the Permian specifically. “All of those things are delivering really stellar reliability at the surface as well as all of the drilling efficiencies and completion efficiencies that we’ve talked to you about before.”