Bloomberg Audio Studios, podcasts, radio, news. President Donald Trump touting lower prices.
We're down lower than we've been in seven years in gasoline prices and oil prices, not just the three states that I talk about with 199 a gallon. How would you like to have 199? You know, that's the equivalent of a very major tax cut. You know, when you get the energy prices down.
The national average for gas falling below $3 a gallon for the first time since 2021. Mike Worth, the CEO of Chevron, joins us now for an exclusive interview.
I am so glad that we're getting to speak with you, Mike. Thank you so much for being here with us.
So, let's start about that. $1.99 a gallon might be great for a lot of people in terms of filling up their gas tanks. A real question around drill baby drill and how much you're incentivized to increase production given the lower cost of oil.
Well, you know, we make our investment plans on a long-term basis. We look at supply and demand well out into the future. And so the price of oil today can affect short-term financial performance of the company, but it really doesn't play as much into some of the longer term investment plans as we look down the road, not really out the window as we decide what the capital program looks like.
But how do you reconcile the two? Because you're doing a lot of exploration internationally. And to Lisa's point, prices are low and potentially are going to even go lower.
Well, exploration is a long cycle business. We just brought a project online in the Gulf of America last year where the discovery was made 20 years prior. And so the timeline between when you actually make a discovery, when you appraise that and you ultimately develop it and bring it to market can be years or even decades. And so we really have to take that long view on the business. And you know, in the short term, we'll keep costs tight. We've guided to industry-leading free cash flow over the next few years, bring cost down, capital spending down, increase the synergies on the Hess transaction. So we're going to deliver strong financial performance through the cycle.
Based on what the IEA has said, recalibrated where they see oil demand growing. It was 2030, now it's 2050. OPEC says they had a rendezvous with reality seeing that the world needs a lot more of this, a lot more fossil fuels. If outlook is so strong, should Chevron, should all of these big oil companies, should they be increasing more of that investment?
Well, on the IEA, even a broken clock is right twice a day. So, they have finally acknowledged what we've long known, which is that the world will continue using oil and gas for many decades into the future. We are in that long cycle business. And you know, the capital spending has become more efficient in our industry. A decade ago, we were spending money on big projects. There was a lot of growth going on in shale at a relatively high cost structure and the entire industry has found ways to standardize designs, simplify projects, and actually get more for every capital dollar that we spend. So the size of our capital spending doesn't necessarily correlate to the growth the way that it would have in years gone by.
When it comes to expansion, the US government is backing this plan Iraq has to transfer Lukoil oil stakes to an American company. So, it's really only you or Exxon. How are those negotiations going?
Well, I can't comment on commercial negotiations. What I will say is we've got a well-established reputation as a good partner, as a world-class operator in international locations. We're sought out as a partner in countries around the world. We got a long history working in the Middle East and we put a real premium on partnership and that goes to every country we work with and every company we work with.
Can you talk about those assets though? Do you think those would be good assets to the Chevron portfolio?
Well, we always look to strengthen our portfolio. Iraq is a country that's blessed with very substantial petroleum resources and some of the largest fields in the world. And so those are the kinds of things that we always look at.
You've been talking about the capital profile and investments and how it's become a lot more efficient to make the same kinds of investments and frankly the same kind of output. Where is this efficiency coming from? Is it coming from artificial intelligence? Is it coming from just better technology and getting oil and gas out of the ground?
