Chevron Corp. (NYSE: CVX) plans to increase its production of oil-equivalent barrels by 20%, compared with its 2011 production of about 2.7 million barrels/day. In its analyst presentation today, the company points out that its massive Gorgon liquefied natural gas (LNG) project offshore of Australia will begin operation over the next couple of years and that these “long-lived assets … will generate significant cash flow for decades.” In its latest Form 10-K, Chevron, which owns 47.3% of the Gorgon project and is the operator, said the total cost of the project to date is $37 billion. The company also noted that it holds leases on more than 8 million acres of unconventional shale plays in North America.

Chevron’s total production in 2011 was lower by about 110,000 barrels/day compared to 2010 production. The company attributed this to natural reservoir declines, but points to its increased lease holdings in the US and its major capital projects as the source of production growth. Chevron’s capital spending plan through 2017 comprises 37% of total spend on LNG projects, 28% on deepwater projects, 14% on conventional oil projects, and just 2% on unconventional oil & gas projects.

The spending on LNG projects reflects the high prices that Asian buyers are willing to pay when compared with prices for natural gas in the US, where shale gas drilling has cut prices to well below $2.50/thousand cubic feet. The price for an equal amount of natural gas in Asia is expected to reach $18 by this summer.

Chevron’s presentation is available here.

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