Chevron on Friday signaled that crude from Guyana is becoming an increasingly important part of its global supply system, as the U.S. oil major leans on a more flexible portfolio of equity barrels to boost refining margins and navigate volatile markets.
Chief Executive Officer (CEO) Mike Wirth told investors that Guyana is among a group of “diverse waterborne equity crudes” that underpin Chevron’s ability to optimize flows across regions, alongside supplies from Kazakhstan, the Permian basin, Venezuela and Argentina.
“The unique combination of Chevron Corporation’s industry-leading refining complexity and our diverse waterborne equity crudes from [Tengizchevroil] TCO, Guyana, the Permian, Venezuela, and Argentina creates opportunities for value capture through integration,” Wirth said on the company’s first-quarter earnings call.
The approach allows Chevron to redirect crude to where it is most needed, maintain high refinery utilization and capture margins as prices shift across the value chain, particularly during periods of supply disruption.
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“Our portfolio provides options to move things around in times like this,” Wirth said, as tensions in the Middle East strain supply networks and drive up prices.
Chevron has been increasing its use of equity crude within its refining system. Wirth said U.S. refineries are now running more than 50% equity crude, while the company expects that share to exceed 40% in Asia, a significant rise from historical levels.
The shift enhances Chevron’s ability to capture value when margins move between upstream production and downstream refining, a dynamic that has been amplified by recent market volatility.
Guyana’s inclusion in that portfolio reflects its growing importance as a source of globally traded crude, with output in the South American country rising rapidly in recent years. Markets in Europe and North America have increased imports of Guyana’s crudes in recent years.
Chevron gained direct exposure to those barrels through its acquisition of Hess, which holds a 30% stake in the prolific Stabroek Block offshore Guyana.
The deal cleared a major hurdle last year after Chevron prevailed in a legal dispute with ExxonMobil, allowing it to proceed with the acquisition and secure a foothold in one of the world’s fastest-growing oil-producing regions.
Wirth said Chevron’s integrated upstream and downstream operations delivered “significant integration benefits” during the quarter, as the company maintained supply into tight markets and maximized margins.
