(By Mani) For Chevron Corp. (NYSE:CVX), the next leg of growth could come from the Deepwater Gulf of Mexico, where the oil major's relatively large position and disproportionate exploration success have suffered badly after the BP Macondo oil spill tragedy.
Following the BP Macondo disaster, subsequent drilling moratorium and "permitorium" – have slowed down due to increased regulatory pressure and environmental concern.
Chevron needs increased activity to pursue its huge finds in the basin, notably the Lower Tertiary play of ultra deepwater, ultra large discoveries that have significant development challenges but enormous, long term potential.
In addition, San Ramon, California-based Chevron remains uniquely strongly positioned in terms of long term Brent-based oil leverage, is for steam flood, which the company is a leader in from years of Indonesian experience, is applied to the Middle East.
"The project to watch here is in Kuwait, and would provide, it is estimated, some 12-20 billion barrels of resource exploitation if approved by the Parliament," Deutsche Bank analyst Paul Sankey wrote in a note to clients.
Meanwhile, the company is notably underweight US natural gas and US unconventional exposure, but in November 2010, Chevron announced it would acquire Pennsylvania-based Atlas Energy for $3.2 billion in cash and an additional $1.1 billion in debt.
That was a surprise move for a company that had talked down its interest in US gas, and it maintained that it was under-weight US natural gas and post-deal remained that way.