1 00:00:02,520 --> 00:00:07,040 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:07,800 --> 00:00:10,200 Speaker 2: President Donald Trump touting lower prices. 3 00:00:11,480 --> 00:00:14,440 Speaker 3: We're down lower than we've been in seven years, and 4 00:00:14,680 --> 00:00:18,000 Speaker 3: gasoline prices and oil prices, not just the three states 5 00:00:18,000 --> 00:00:20,439 Speaker 3: that I talk about. With one ninety ninety. 6 00:00:20,160 --> 00:00:21,840 Speaker 1: Gallon, how would you like to have one ninety nine? 7 00:00:22,040 --> 00:00:28,680 Speaker 3: Do you know that's that's the equivalent of a very. 8 00:00:28,840 --> 00:00:31,600 Speaker 2: Major tax cut, you know, when you get the energy 9 00:00:31,640 --> 00:00:34,800 Speaker 2: prices down, the national average for gas falling below three 10 00:00:34,880 --> 00:00:38,240 Speaker 2: dollars a gallon for the first time since twenty twenty one. 11 00:00:38,600 --> 00:00:41,199 Speaker 2: Mike Worth, the CEO of Chevron, joins us now for 12 00:00:41,240 --> 00:00:43,600 Speaker 2: an exclusive interview. I am so glad that we're going 13 00:00:43,760 --> 00:00:45,159 Speaker 2: to speak with you, Mike. Thank you so much for 14 00:00:45,200 --> 00:00:45,919 Speaker 2: being here with us. 15 00:00:46,000 --> 00:00:46,760 Speaker 3: You're welcome, Lisa. 16 00:00:46,880 --> 00:00:49,320 Speaker 2: So let's start about that one ninety nine a gallon. 17 00:00:49,360 --> 00:00:51,640 Speaker 2: It might be great for a lot of people in 18 00:00:51,720 --> 00:00:54,480 Speaker 2: terms of filling up their gas tanks. A real question 19 00:00:54,520 --> 00:00:57,200 Speaker 2: around drill, baby, drill, and how much you're incentivized to 20 00:00:57,280 --> 00:01:00,200 Speaker 2: increase production given the lower cost of all. 21 00:01:01,080 --> 00:01:03,320 Speaker 3: Well, you know, we make our investment plans on a 22 00:01:03,360 --> 00:01:05,960 Speaker 3: long term basis. We look at supply and demand well 23 00:01:05,959 --> 00:01:09,320 Speaker 3: out into the future, and so the price of oil 24 00:01:09,440 --> 00:01:13,440 Speaker 3: today can affect short term financial performance of the company, 25 00:01:13,680 --> 00:01:15,760 Speaker 3: but it really doesn't play as much into some of 26 00:01:15,800 --> 00:01:20,000 Speaker 3: the longer term investment plans as we look down the road, 27 00:01:20,040 --> 00:01:22,839 Speaker 3: not really out the window as we decide what the 28 00:01:22,880 --> 00:01:24,080 Speaker 3: capital program looks like. 29 00:01:24,240 --> 00:01:26,000 Speaker 1: But how do you reconcile the too sure doing a 30 00:01:26,040 --> 00:01:29,800 Speaker 1: lot of exploration internationally, and to Lisa's point, prices are 31 00:01:29,920 --> 00:01:32,199 Speaker 1: low and potentially are going to even go lower. 32 00:01:33,040 --> 00:01:37,479 Speaker 3: Well, exploration is a long cycle business. We just brought 33 00:01:37,480 --> 00:01:41,160 Speaker 3: a project online in the Gulf of America last year 34 00:01:41,520 --> 00:01:44,520 Speaker 3: where the discovery was made twenty years prior, and so 35 00:01:44,760 --> 00:01:47,760 Speaker 3: the timeline between when you actually make a discovery, when 36 00:01:47,760 --> 00:01:50,160 Speaker 3: you appraise that and you ultimately develop and bring it 37 00:01:50,200 --> 00:01:52,880 Speaker 3: to market can be years or even decades. And so 38 00:01:52,920 --> 00:01:56,360 Speaker 3: we really have to take that long view on the business. 39 00:01:56,760 --> 00:01:59,520 Speaker 3: And you know, in the short term we'll keep cost tight. 40 00:01:59,560 --> 00:02:02,440 Speaker 3: We've got to industry leading free cash flow over the 41 00:02:02,480 --> 00:02:05,280 Speaker 3: next few years as we'ringing cost down, capital spending down, 42 00:02:05,760 --> 00:02:09,240 Speaker 3: increase the synergies on the hes transaction. So we're going 43 00:02:09,280 --> 00:02:12,079 Speaker 3: to deliver strong financial performance through the cycle. 44 00:02:12,440 --> 00:02:15,160 Speaker 1: Based on what the IA has said recalibrated where they 45 00:02:15,200 --> 00:02:17,520 Speaker 1: see oil demand growing. It was twenty thirty, now it's 46 00:02:17,560 --> 00:02:20,600 Speaker 1: twenty fifty. Ope says they had a rendezvous with reality, 47 00:02:20,639 --> 00:02:23,040 Speaker 1: seeing that the world needs a lot more of this, 48 00:02:23,639 --> 00:02:25,079 Speaker 1: a lot more fossil fuels. 49 00:02:25,480 --> 00:02:26,240 Speaker 2: If outlook is. 50 00:02:26,240 --> 00:02:28,840 Speaker 1: So strong, should Chevron, should all. 51 00:02:28,760 --> 00:02:29,960 Speaker 3: Of these big oil companies? 52 00:02:30,040 --> 00:02:32,560 Speaker 1: So do they increasing more of that investment? 53 00:02:33,000 --> 00:02:36,360 Speaker 3: Well, on the idea, even a blow broken clock is 54 00:02:36,480 --> 00:02:39,720 Speaker 3: right twice a day. So they have finally acknowledged what 55 00:02:39,760 --> 00:02:42,399 Speaker 3: we've long known, which is that the world will continue 56 00:02:42,520 --> 00:02:45,959 Speaker 3: using oil and gas for many decades into the future. 57 00:02:46,760 --> 00:02:51,840 Speaker 3: We are in that long cycle business and the capital 58 00:02:51,840 --> 00:02:54,840 Speaker 3: spending amory has become more efficient in our industry. A 59 00:02:54,840 --> 00:02:57,960 Speaker 3: decade ago, we were spending money on big projects. There's 60 00:02:58,000 --> 00:03:00,200 Speaker 3: a lot of growth going on in shale at a 61 00:03:00,200 --> 00:03:02,880 Speaker 3: relatively high cost structure, and the entire industry has found 62 00:03:02,960 --> 00:03:07,519 Speaker 3: ways to standardize designs, simplify projects, and actually get more 63 00:03:07,560 --> 00:03:10,280 Speaker 3: for every capital dollar that we spend, so the size 64 00:03:10,320 --> 00:03:14,760 Speaker 3: of our capital spending doesn't necessarily correlate to the growth. 65 00:03:14,480 --> 00:03:16,440 Speaker 1: The way that it would have in years gone by 66 00:03:16,560 --> 00:03:19,200 Speaker 1: when it comes to expansion. The US government is backing 67 00:03:19,200 --> 00:03:21,960 Speaker 1: this plan of Rock has to transfer Louke Oil stakes 68 00:03:22,040 --> 00:03:25,480 Speaker 1: to an American company, So it's really only your x 69 00:03:25,560 --> 00:03:27,920 Speaker 1: on how are those negotiations going. 70 00:03:28,240 --> 00:03:32,160 Speaker 3: Well, I can't comment on commercial negotiations. What I will 71 00:03:32,200 --> 00:03:35,960 Speaker 3: say is we've got a well established reputation as a 72 00:03:36,040 --> 00:03:41,040 Speaker 3: good partner, as a world class operator in international locations. 73 00:03:41,520 --> 00:03:44,440 Speaker 3: We're sought out as a partner in countries around the world. 74 00:03:44,520 --> 00:03:47,080 Speaker 3: We got long history working in the Middle East, and 75 00:03:47,400 --> 00:03:50,760 Speaker 3: we put a real premium on partnership and that goes 76 00:03:50,800 --> 00:03:53,040 Speaker 3: to every country we work with and every company we 77 00:03:53,080 --> 00:03:53,440 Speaker 3: work with. 78 00:03:53,520 --> 00:03:55,520 Speaker 1: Can you talk about those assets though, do you think 79 00:03:55,560 --> 00:03:58,000 Speaker 1: those would be good assets the Chevron portfolio? 80 00:03:58,080 --> 00:04:01,000 Speaker 3: Well, we always look to strengthen our portfolio. Iraq is 81 00:04:01,040 --> 00:04:06,240 Speaker 3: a country that's blessed with very substantial petroleum resources and 82 00:04:06,320 --> 00:04:07,960 Speaker 3: some of the largest fields in the world, and so 83 00:04:07,960 --> 00:04:09,680 Speaker 3: those are the kinds of things that we always look at. 84 00:04:09,840 --> 00:04:12,320 Speaker 2: If you're talking about the capital profile and investments, and 85 00:04:12,360 --> 00:04:14,720 Speaker 2: how it's become a lot more efficient to make the 86 00:04:14,720 --> 00:04:19,640 Speaker 2: same kinds of investments and frankly the same kind of output. 87 00:04:19,920 --> 00:04:22,520 Speaker 2: Where is this sufficiency coming from. Is it coming from 88 00:04:22,680 --> 00:04:26,720 Speaker 2: artificial intelligence? Is is it coming from just better technology 89 00:04:26,720 --> 00:04:29,200 Speaker 2: and getting oil and gas out of the ground. 90 00:04:29,800 --> 00:04:33,120 Speaker 3: Yeah, So in shale, for instance, which is something the 91 00:04:33,200 --> 00:04:36,640 Speaker 3: US has been a world leader. In a decade ago, 92 00:04:36,880 --> 00:04:39,560 Speaker 3: break evens were seventy or eighty dollars a barrel. Today 93 00:04:39,720 --> 00:04:42,280 Speaker 3: they're not even half of that, as we found ways 94 00:04:42,320 --> 00:04:45,800 Speaker 3: to drill longer laterals, to optimize the spacing of wells, 95 00:04:45,839 --> 00:04:49,560 Speaker 3: to complete wells at lower cost with greater production coming 96 00:04:49,600 --> 00:04:51,520 Speaker 3: out of them. So it's a series of things. In 97 00:04:51,560 --> 00:04:55,640 Speaker 3: the deep water, we've simplified and standardized designs, and what 98 00:04:55,839 --> 00:04:59,159 Speaker 3: used to take thirty dollars a barrel or more in 99 00:04:59,240 --> 00:05:02,159 Speaker 3: terms of cost of capital to go into a project 100 00:05:02,400 --> 00:05:05,400 Speaker 3: now has been cut in half. And so it's not 101 00:05:05,560 --> 00:05:08,800 Speaker 3: driven by AI yet. I do think over time we're 102 00:05:08,839 --> 00:05:12,280 Speaker 3: going to see technologies like that continue this path and 103 00:05:12,360 --> 00:05:13,480 Speaker 3: we're on We're going to get. 104 00:05:13,360 --> 00:05:15,560 Speaker 2: To that in just a second. If that's the case, 105 00:05:15,600 --> 00:05:18,240 Speaker 2: if you can get more even at a break even cost, 106 00:05:18,279 --> 00:05:20,640 Speaker 2: it's a lot lower. Why has the rig count gone 107 00:05:20,720 --> 00:05:24,120 Speaker 2: down so much? Why aren't there more rigs coming online 108 00:05:24,160 --> 00:05:25,960 Speaker 2: given the capacity here in the United States? 109 00:05:26,000 --> 00:05:29,200 Speaker 3: Because we can drill more feet per day with a 110 00:05:29,279 --> 00:05:31,520 Speaker 3: rig today than we could in the past, and so 111 00:05:32,520 --> 00:05:35,240 Speaker 3: rig count is not nearly as interesting a metric as 112 00:05:35,480 --> 00:05:37,440 Speaker 3: how many feet a day you can drill, how many 113 00:05:37,440 --> 00:05:39,599 Speaker 3: wells you can complete in a period of time, and 114 00:05:39,640 --> 00:05:42,520 Speaker 3: so we're getting more work done out of fewer pieces 115 00:05:42,520 --> 00:05:43,040 Speaker 3: of equipment. 116 00:05:43,080 --> 00:05:47,039 Speaker 2: Today, you talk about how AI isn't delivering those efficiencies yet, 117 00:05:47,360 --> 00:05:50,280 Speaker 2: the indication being that maybe down the road it might 118 00:05:50,320 --> 00:05:53,360 Speaker 2: be the case. Where specifically are you thinking, and I'm 119 00:05:53,400 --> 00:05:56,200 Speaker 2: saying at a time when Chevron's cutting staff, so are 120 00:05:56,200 --> 00:05:59,119 Speaker 2: other people. Is this a headcount issue? Is this something else? 121 00:05:59,160 --> 00:06:00,600 Speaker 2: How are you seeing it be deployed? 122 00:06:00,920 --> 00:06:02,560 Speaker 3: Well, we're in I think we're still in the very 123 00:06:02,560 --> 00:06:07,000 Speaker 3: early days of applying AI at scale in our industry. 124 00:06:07,920 --> 00:06:10,760 Speaker 3: One of the things that's undeniable about AI is it 125 00:06:10,800 --> 00:06:13,520 Speaker 3: needs lots of data. A company like ours has as 126 00:06:13,560 --> 00:06:15,840 Speaker 3: much data as just about any company in the world, 127 00:06:15,920 --> 00:06:18,520 Speaker 3: and so we've got decades and decades of geologic data, 128 00:06:18,560 --> 00:06:22,000 Speaker 3: seismic data, operating data, all of which can be used 129 00:06:22,040 --> 00:06:26,160 Speaker 3: to feed these models, to optimize operations, to improve our 130 00:06:26,160 --> 00:06:31,200 Speaker 3: exploration success, to squeeze more production out of existing assets. 131 00:06:31,560 --> 00:06:36,000 Speaker 3: And so we see huge opportunities to run our business 132 00:06:36,040 --> 00:06:40,880 Speaker 3: with smarter technology, get better decisions made faster, and so 133 00:06:41,279 --> 00:06:44,280 Speaker 3: there's certainly a cost dimension to this, but I think 134 00:06:44,320 --> 00:06:46,560 Speaker 3: the real opportunity is going to be about the productivity 135 00:06:46,600 --> 00:06:47,919 Speaker 3: of our assets in our business. 136 00:06:48,160 --> 00:06:50,520 Speaker 1: You announced this project, the first of its kind, to 137 00:06:50,680 --> 00:06:54,120 Speaker 1: provide natural gas fired power for data centers. Do you 138 00:06:54,160 --> 00:06:55,800 Speaker 1: expect to do more of these projects and what's the 139 00:06:55,839 --> 00:06:57,599 Speaker 1: update on this one in West Texas well. 140 00:06:57,640 --> 00:07:01,760 Speaker 3: Certainly, the demand for power has been talked about now 141 00:07:01,800 --> 00:07:05,560 Speaker 3: for the last year or so, as the constraint in 142 00:07:05,839 --> 00:07:09,640 Speaker 3: the growth of AI data centers and the ambition for 143 00:07:09,720 --> 00:07:13,120 Speaker 3: data centers at a scale we've never seen before has 144 00:07:13,160 --> 00:07:18,080 Speaker 3: become a commonplace. The reality is we need large scale power. 145 00:07:18,520 --> 00:07:21,800 Speaker 3: What we're working on is off the grid power because 146 00:07:21,840 --> 00:07:24,160 Speaker 3: it's also becoming an issue with electricity prices and we're 147 00:07:24,160 --> 00:07:28,600 Speaker 3: seeing this show up in consumer sentiment and elections. Our 148 00:07:28,640 --> 00:07:34,680 Speaker 3: approach is to develop gigawatt scale power generation, not through 149 00:07:34,720 --> 00:07:38,080 Speaker 3: the grid, but dedicated to data centers. We've got a 150 00:07:38,120 --> 00:07:40,160 Speaker 3: project in a couple of sites actually we're working on 151 00:07:40,280 --> 00:07:43,040 Speaker 3: in West Texas where we've got a lot of natural gas. 152 00:07:43,480 --> 00:07:46,880 Speaker 3: We've got large gas turbines, the largest in the world 153 00:07:46,960 --> 00:07:51,280 Speaker 3: being delivered starting next year, and we're deep into discussions 154 00:07:51,320 --> 00:07:54,960 Speaker 3: with multiple customers that would like to cite data centers 155 00:07:55,640 --> 00:07:57,240 Speaker 3: to use this power You're. 156 00:07:57,080 --> 00:07:59,640 Speaker 1: At the center of a lot of politically very important 157 00:07:59,680 --> 00:08:01,680 Speaker 1: converse stations, not just when it comes to AI and 158 00:08:01,680 --> 00:08:03,840 Speaker 1: not just when it comes to Luke oil assets. Also 159 00:08:03,920 --> 00:08:06,680 Speaker 1: Venezuela the only American company left. Can you give us 160 00:08:06,680 --> 00:08:09,600 Speaker 1: an update on either conversation with the administration, your team 161 00:08:09,640 --> 00:08:12,920 Speaker 1: on the ground. What is the future of Chevron in 162 00:08:12,960 --> 00:08:15,200 Speaker 1: this country? Is the president's sense maybe he's going to 163 00:08:15,200 --> 00:08:16,080 Speaker 1: send troops there? 164 00:08:16,800 --> 00:08:20,800 Speaker 3: Yeah, I don't know what the presence intentions are. We've 165 00:08:20,800 --> 00:08:24,080 Speaker 3: been in Venezuela for the last one hundred years. Our 166 00:08:24,120 --> 00:08:27,280 Speaker 3: presence there, we believe is important for the local economy, 167 00:08:27,320 --> 00:08:31,000 Speaker 3: the regional economy, the people of Venezuela. The Venezuelan oil 168 00:08:31,080 --> 00:08:34,720 Speaker 3: is sought after by US refiners, and we operate there 169 00:08:34,720 --> 00:08:37,680 Speaker 3: in full compliance with all US law and sanctions. We're 170 00:08:37,679 --> 00:08:40,640 Speaker 3: in discussions with the administration to ensure that we stay 171 00:08:40,679 --> 00:08:44,520 Speaker 3: in compliance, that they understand the value that our presence 172 00:08:44,760 --> 00:08:45,880 Speaker 3: brings to America. 173 00:08:46,280 --> 00:08:49,920 Speaker 1: And so you know that's and you plan on being 174 00:08:49,960 --> 00:08:51,680 Speaker 1: there for the long term. 175 00:08:52,360 --> 00:08:55,560 Speaker 3: Venezuela actually has more oil and gas resource than Saudi Arabia. 176 00:08:55,920 --> 00:08:59,160 Speaker 3: It's right here in our hemisphere, very close to the 177 00:08:59,200 --> 00:09:02,720 Speaker 3: Gulf coast. Refine and in complex and we've been there 178 00:09:02,760 --> 00:09:06,000 Speaker 3: through ups and downs, and like many places in the world, 179 00:09:06,480 --> 00:09:08,680 Speaker 3: we have to take a long view on our presence 180 00:09:08,800 --> 00:09:09,880 Speaker 3: in countries like this. 181 00:09:10,160 --> 00:09:13,720 Speaker 1: You talked about succession yesterday at this conference. How are 182 00:09:13,720 --> 00:09:16,000 Speaker 1: you thinking about that as you talk to the board? 183 00:09:16,040 --> 00:09:18,120 Speaker 1: Is there something you want to get done before you 184 00:09:18,200 --> 00:09:19,160 Speaker 1: hand over the reins? 185 00:09:19,360 --> 00:09:22,760 Speaker 3: Well, succession discussions begin on day one. I think for 186 00:09:22,840 --> 00:09:26,360 Speaker 3: most CEOs it's part of a board's responsibility to be 187 00:09:26,400 --> 00:09:29,839 Speaker 3: thinking about the next generational leadership. I have a long 188 00:09:29,880 --> 00:09:32,480 Speaker 3: list of things, some of which have been accomplished. I 189 00:09:32,480 --> 00:09:34,560 Speaker 3: mentioned the Hest transaction, which was a big one for 190 00:09:34,679 --> 00:09:37,960 Speaker 3: US earlier this year. We have laid out a plan 191 00:09:38,120 --> 00:09:40,440 Speaker 3: for the next several years to investors last month that 192 00:09:40,559 --> 00:09:44,000 Speaker 3: grows free cash flow, that drives a significant return to 193 00:09:44,080 --> 00:09:46,320 Speaker 3: cash to shareholders. All of those are things that I 194 00:09:46,360 --> 00:09:48,719 Speaker 3: want to make progress on. But when the time is 195 00:09:48,800 --> 00:09:50,960 Speaker 3: right for someone to follow me in this job, the 196 00:09:50,960 --> 00:09:56,439 Speaker 3: board will make that determination and I will happily hand over. 197 00:09:56,600 --> 00:09:58,079 Speaker 1: Will you go right for Landman? 198 00:09:59,360 --> 00:10:01,559 Speaker 2: Just three seconds left? Do you think that in ten 199 00:10:01,640 --> 00:10:05,000 Speaker 2: years gas or oil is going to be more valuable? 200 00:10:06,200 --> 00:10:10,560 Speaker 3: Well on an energy content basis, you know oil's got 201 00:10:10,559 --> 00:10:13,440 Speaker 3: about six times more energy content per unit of volume 202 00:10:13,440 --> 00:10:15,960 Speaker 3: than gas to us, and so you know they trade 203 00:10:16,040 --> 00:10:19,720 Speaker 3: in sympathy with one another because energy is somewhat fungible. 204 00:10:20,440 --> 00:10:22,439 Speaker 3: I think both of those commodities are going to be 205 00:10:22,559 --> 00:10:24,960 Speaker 3: essential to the global economy. I think demand for both 206 00:10:24,960 --> 00:10:26,960 Speaker 3: of those will be much higher than it is today. 207 00:10:27,000 --> 00:10:28,400 Speaker 3: And I think you're going to see good companies in 208 00:10:28,400 --> 00:10:31,160 Speaker 3: our industry still producing more of that and doing it 209 00:10:31,200 --> 00:10:33,480 Speaker 3: in a way that keeps costs very affordable for the economy. 210 00:10:33,600 --> 00:10:35,360 Speaker 2: My fourth wonderful to see you. Thank you so much 211 00:10:35,360 --> 00:10:37,480 Speaker 2: for being with us here this morning. Mike Worth, the 212 00:10:37,520 --> 00:10:39,000 Speaker 2: CEO of Chevron