Chevron Goes Hunting: Oil Giant Lifts Exploration Spending 50% and Eyes Nigeria, Angola and Namibia
U.S. supermajor Chevron is returning to high-impact frontier exploration as it looks to refresh its portfolio. Exploration in Nigeria and other parts of Africa, South America and the Eastern Mediterranean is now a key focus of its upstream business, which the company wants to turn around by adding reserves and production growth opportunities. The other countries named in its new frontier investments are Guyana, Angola, Namibia, Guinea-Bissau, Equatorial Guinea and Egypt.
The revived programme is led by Kevin McLachlan, vice president of exploration, who took over the exploration arm last year. Chevron recruited him from France’s TotalEnergies, where he oversaw work on the Venus discovery in Namibia’s offshore Orange Basin, one of the most promising recent finds in a frontier area.
McLachlan told the Financial Times in September that Chevron is raising its exploration budget this year by 50 per cent from last year. Spending could top $1.5 billion, up from just under $1 billion in 2025. “We needed to increase the spend because we just didn’t have the exposure,” he said. “So we’ve increased our spend on seismic data, which is the enabling piece of how to generate prospects, without which you can’t generate ideas.”
Two years ago Chevron was drilling about 10 exploration wells a year. Its 2027 programme includes 20 exploration wells and possibly up to six appraisal wells. In a more recent interview with The Wall Street Journal this month, McLachlan said about 50 per cent of the exploration budget is now going into undeveloped frontier basins, up from 20% a few years ago.
Chevron chief executive Mike Wirth has described the turnaround. In August last year he told analysts: “I’m not happy with the results out of exploration over the last few years.” On this year’s second-quarter earnings call he said Chevron has now built “the largest and highest quality opportunity set that we’ve had in years, probably in my time in this role,” after increasing exploration acreage by 35% over the past year.
Analysts at Wood Mackenzie say the need for portfolio renewal and diversification is raising upstream firms’ appetite for exploration risk, with companies taking more exposure and positioning earlier in their exploration targets. Supermajors also need to add reserves to offset declines at existing assets.
Chevron has announced discoveries in Nigeria and Angola in recent months and plans to drill the Nabba-1X exploration well in Namibia by the end of the year, as part of a multi-well exploration programme across the region. “Every successful well adds information, confidence and potential pathways for future growth,” McLachlan said of the Angola discovery and the wider campaign.
Source: orientalnewsng.com
