Chevron, one of the major oil&gas producer is shifting its focus to the Middle East from U.S shale gas reserves because of the political changing scenario.
CEO of the Chevron Michael Wirth said that there is a reconciliation atmosphere going on which can make a Middle East favourite for the cheap gas as a fuel to outstrip oil. The company wants to sign new deals with different stakeholders in this region and wants to reduce its spending on shale gas exploration.
The chevron boughtNoble energy for $11.8 billion which holds a stake of about 40% in the Leviathan gas field in the Mediterranean Sea.
Chevron also taking their major allies on board regarding Noble energy deal. They discussed their noble energy deal with Saudi Arabia because Saudi Arabia is a key partner in their several oil projects.
There are still regional, political and security risk in this region due to which many companies were unable to do the investment in past. For example, Syria and Yemen are fighting with eachother for centuries and Saudi Arabia and Iran also involved in proxy wars.Despite all the risk Chevron is ploughing ahead with efforts across the region.
European and Asian nations have been moving toward gas, solar and wind, and away from coal and nuclear power.Christopher Kalnin, CEO of Banpu Kalnin Ventures said that people need gas with renewables and Asia need more gas. The reality is you need gas in tandem with renewables.
Oil consumption is declining and global gas demand is increasingand till 2025 it is projected to rise 1.5% every year.
Chevron has no footprints in the Middle East except Saudi Arabia where it is investingforthe last 70 years. The Noble energy deal will help Chevron to increase its presence in this energy-rich area and it will also keep the company in the top 10 gas supplier companies. It will also helpful for the company to bid for a stake in other LNG production expansions.
Chevron has intensified cost-cutting at home and has slashed its spending by half in Uh.S shale gas. There are only four active rigs at the moment in Permian Basinas of September.