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00:00So let's start about that. $199 a gallon, it might be great for a lot of people in terms of
00:05filling up their gas tanks. A real question around drill baby drill and how much you're
00:09incentivized to increase production given the lower cost of oil. Well, we make our investment
00:15plans on a long-term basis. We look at supply and demand well out into the future. And so the
00:20price of oil today can affect short-term financial performance of the company, but it really doesn't
00:28play as much into some of the longer-term investment plans as we look down the road,
00:33not really out the window as we decide what the capital program looks like. But how do you
00:38reconcile the two? Because you're doing a lot of exploration internationally. And to Lisa's point,
00:42prices are low and potentially are going to even go lower. Well, exploration is a long-cycle
00:49business. We just brought a project online in the Gulf of America last year where the discovery was
00:55made 20 years prior. And so the timeline between when you actually make a discovery,
01:00when you appraise that, and you ultimately develop it and bring it to market can be years or even
01:05decades. And so we really have to take that long view on the business. And in the short term,
01:11we'll keep costs tight. We've guided to industry-leading free cash flow over the next few
01:16years as we bring costs down, capital spending down, increase the synergies on the Hess transaction.
01:21So we're going to deliver strong financial performance through the cycle.
01:25Based on what the IEA has said, recalibrated where they see oil demand growing. It was 2030,
01:30now it's 2050. OPEC says they had a rendezvous with reality, seeing that the world needs a lot more of
01:36this, a lot more fossil fuels. If outlook is so strong, should Chevron, should all of these big
01:42oil companies, should they be increasing more of that investment?
01:45Well, on the IEA, even a broken clock is right twice a day. So they have finally acknowledged
01:52what we've long known, which is that the world will continue using oil and gas for many decades
01:58into the future. We are in that long cycle business. And the capital spending, Anne-Marie,
02:06has become more efficient in our industry. A decade ago, we were spending money on big projects. There
02:11was a lot of growth going on in shale at a relatively high cost structure. And the entire industry
02:15has found ways to standardize designs, simplify projects, and actually get more for every capital
02:21dollar that we spend. So the size of our capital spending doesn't necessarily correlate to the
02:27growth the way that it would have in years gone by.
02:29When it comes to expansion, the U.S. government is backing this plan Iraq has to transfer
02:34luke oil stakes to an American company. So it's really only you or Exxon. How are those negotiations
02:40going? Well, I can't comment on commercial negotiations. What I will say is we've got a
02:46well-established reputation as a good partner, as a world-class operator in international locations.
02:54We're sought out as a partner in countries around the world. We have a long history working
02:58in the Middle East. And we put a real premium on partnership. And that goes to every country we work
03:05with and every company we work with. Can you talk about those assets, though? Do you think those
03:09would be good assets to the Chevron portfolio? Well, we always look to strengthen our portfolio.
03:13Iraq is a country that's blessed with very substantial petroleum resources and some of
03:19the largest fields in the world. And so those are the kinds of things that we always look at.
03:23You've been talking about the capital profile and investments and how it's become a lot more
03:26efficient to make the same kinds of sort of investments and, frankly, the same kind of output.
03:33Where is this efficiency coming from? Is it coming from artificial intelligence? Is it becoming,
03:37is it coming from just better technology and getting oil and gas out of the ground?
03:43Yeah. So in shale, for instance, which is something the U.S. has been a world leader in,
03:48a decade ago, break-evens were $70 or $80 a barrel. Today, they're not even half of that,
03:54as we've found ways to drill longer laterals, to optimize the spacing of wells, to complete wells
03:59at lower cost with greater production coming out of them. So it's a series of things.
04:04In the deep water, we've simplified and standardized designs. And what used to take $30 a barrel or
04:12more in terms of cost of capital to go into a project now has been cut in half. And so it's not
04:18driven by AI yet. I do think over time, we're going to see technologies like that continue this path
04:25that we're on.
04:26We're going to get to that in just a second. If that's the case, if you can get more,
04:29even at a break-even cost, it's a lot lower. Why has the rig count gone down so much?
04:35Why aren't there more rigs coming online, given the capacity here in the United States?
04:39Because we can drill more feet per day with a rig today than we could in the past. And so
04:44rig count is not nearly as interesting a metric as how many feet a day you can drill,
04:50how many wells you can complete in a period of time. And so we're getting more work done out of
04:55fewer pieces of equipment today.
04:56You talk about how AI isn't delivering those efficiencies yet, the indication being that
05:01maybe down the road, it might be the case. Where specifically are you thinking? And I'm saying at a
05:07time when Chevron's cutting staff, so are other people. Is this a headcount issue? Is this something
05:12else? How are you seeing it being deployed?
05:14Well, I think we're still in the very early days of applying AI at scale in our industry.
05:20One of the things that's undeniable about AI is it needs lots of data. A company like ours has as
05:26much data as just about any company in the world. And so we've got decades and decades of geologic
05:31data, seismic data, operating data, all of which can be used to feed these models, to optimize
05:37operations, to improve our exploration success, to squeeze more production out of existing assets.
05:44And so we see huge opportunities to run our business with smarter technology, get better
05:51decisions made faster. And so there's certainly a cost dimension to this. But I think the real
05:57opportunity is going to be about the productivity of our assets and our business.
06:01You announced this project, the first of its kind, to provide natural gas-fired power for
06:06data centers. Do you expect to do more of these projects? And what's the update on this one in West
06:10Texas? Well, certainly the demand for power has been talked about now for the last year or so
06:16as the constraint in the growth of AI data centers and the ambition for data centers at a scale we've
06:24never seen before has become a commonplace. The reality is we need large-scale power. What we're
06:32working on is off-the-grid power because it's also becoming an issue with electricity prices. And we're
06:37seeing this show up in consumer sentiment, in elections. Our approach is to develop gigawatt-scale
06:45power generation, not through the grid, but dedicated to data centers. We've got a project in a couple of
06:52sites actually we're working on in West Texas. We've got a lot of natural gas. We've got large gas
06:58turbines, the largest in the world, being delivered starting next year. And we're deep into discussions with
07:04multiple customers that would like to cite data centers to use this power.
07:10You're at the center of a lot of politically very important conversations, not just when it comes
07:14to AI, not just when it comes to luke oil assets, also Venezuela, the only American company left.
07:19Can you give us an update on either conversations with the administration, your team on the ground?
07:24What is the future of Chevron in this country? As the president says, maybe he's going to send
07:28troops there. Yeah, I don't know what the president's intentions are. We've been in Venezuela for the
07:35last 100 years. Our presence there, we believe, is important for the local economy, the regional
07:41economy, the people of Venezuela. The Venezuelan oil is sought after by U.S. refiners, and we operate
07:47there in full compliance with all U.S. law and sanctions. We're in discussions with the administration to
07:52ensure that we stay in compliance, that they understand the value that our presence brings to
07:58America. And so, you know, that's... And you plan on being there for the long term?
08:05Venezuela actually has more oil and gas resource than Saudi Arabia. It's right here in our hemisphere,
08:11very close to the Gulf Coast refining complex. And we've been there through ups and downs. And like many
08:18places in the world, we have to take a long view on our presence in countries like this.
08:23You talked about succession yesterday at this conference. How are you thinking about that as you
08:28talk to the board? Is there something you want to get done before you hand over the reins?
08:32Well, the succession discussions begin on day one, I think, for most CEOs. It's part of a board's
08:38responsibility to be thinking about the next generation of leadership. I have a long list of things,
08:44some of which have been accomplished. I mentioned the Hess transaction,
08:46which was a big one for us earlier this year. We have laid out a plan for the next several years
08:52to investors last month that grows free cash flow, that drives a significant return of cash to
08:57shareholders. All of those are things that I want to make progress on. But when the time is right for
09:02someone to follow me in this job, the board will make that determination. And I will happily
09:09hand over to the next person. Will you go right for Landman?
09:11Just 30 seconds left. Do you think that in 10 years, gas or oil is going to be more valuable?
09:18Well, on an energy content basis, oil's got about six times more energy content per unit of volume
09:26than gas does. And so they trade in sympathy with one another because energy is somewhat fungible.
09:33I think both of those commodities are going to be essential to the global economy. I think demand for
09:37both of those will be much higher than it is today. And I think you're going to see good companies in
09:41our industry still producing more of that and doing it in a way that keeps costs very affordable for the
09:46economy.
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