Chevron CEO: Oil, Gas, Coal Have ‘Predominant Role’ Long Term

Watson suggested that oil prices are likely to rise, not necessarily due to growing demand, but simply by the need to maintain current supply. Oil fields, by nature, decline over time, and replenishing the supply to address that decline is becoming increasingly expensive, he said.

While Chevron is actively engaged in seeking out opportunities to produce more natural gas, the company hasn’t yet found economically viable opportunities in shale-gas resources in the U.S., Watson said.

Chevron, which produces much of the world’s oil and natural gas in offshore fields, has safety and oil-spill prevention standards that are above the industry’s minimum standard, Watson claimed.

Watson said the explosion of BP PLC’s (BP, BP.LN) Deepwater Horizon oil rig in the Gulf of Mexico last spring, which resulted in nearly five million barrels of oil being spilled into the Gulf, “was utterly preventable.” He added that Chevron has been working with other companies in the oil industry to beef up industry best practices and “raise the bar” of minimum safety standards for operating offshore.

“In any business, technology advances and you need to focus on getting better,” Watson said. “A heart surgeon doesn’t perform surgery the same way he did 20 years ago and the same thing is true for our business.”

That said, Chevron is looking forward to “getting back to work” on offshore oil projects in the Gulf, Watson said. He said he believes the U.S. government’s current moratorium on deep-water drilling in the Gulf, and an unofficial “de facto” moratorium on other offshore activities in the Gulf, will be lifted soon, possibly by mid-November.

On the subject of climate-change policy, Watson said neither he nor Chevron has taken a position on a California proposal set for the November ballot that would suspend the state’s climate law. Instead, Chevron is working with state regulators to ensure that regulations tied to the law are crafted in a way that doesn’t put California companies at a disadvantage to companies elsewhere in the U.S. and the world.

Capital.gr