Super-major Chevron Corporation (NYSE:CVX) is generating record operating cash flow and advancing its strong project queue, executives said at the company's annual meeting with financial analysts in New York.
"Operationally and financially, 2010 was an outstanding year. We continue to deliver on our commitments," said John Watson, Chevron's chairman and CEO. "We improved our safety performance in 2010, once again closing the year with a world-class standing. We also exceeded our oil and gas production target and made excellent progress on our downstream restructuring." Watson went on to add, "Over the next few years, our full attention will be on completing our major natural gas development projects in Australia, which will deliver Chevron's next wave of significant growth."
George Kirkland, vice chairman and executive vice president, Upstream and Gas, outlined the strong 2010 results of the upstream business, focusing on the performance improvements from existing producing assets and the profitability of recent project startups.
Looking forward, Kirkland described the portfolio that will be the growth engine for Chevron. "We continue to advance our major capital projects and we are on track to meet key project milestones." Kirkland also discussed the extensive new acreage that was added to the portfolio in the past year. "Longer term, our early, low-cost entries into new acreage will generate opportunities for further organic growth. We believe this differentiates us from many of our competitors and will provide superior financial results."
During the upstream discussion, Jim Blackwell, executive vice president, Technology and Services, highlighted the importance of Asia Pacific to Chevron's growth story. "There is broad consensus on the growing role of natural gas in the world's future energy mix. The center of growth will be Asia, and Chevron is the best positioned international oil company to supply that growing demand."
Blackwell's presentation highlighted a number of projects across the Asia Pacific region, culminating in a detailed review of Chevron's key LNG projects under way in Australia - Gorgon and Wheatstone.
Mike Wirth, executive vice president, Downstream and Chemicals, focused on the progress that has been made improving returns in Chevron's downstream business. "Last year, we announced our plans to take aggressive actions to improve the competitiveness of our downstream business. We have made significant strides in the first year of our three-year plan." Wirth outlined cost reduction efforts and portfolio actions that are underway which will contribute to improved financial performance in the coming years.
Pat Yarrington, vice president and chief financial officer, emphasized Chevron's strong financial capacity and discipline continue to be a competitive advantage. "The capital investments from recent years are delivering top tier cash flow and earnings per share, generating the strongest balance sheet in our peer group. This gives us the capacity to fund an unparalleled project queue and to reward shareholders with competitive dividend growth and share repurchases."