Chevron’s Project Kilby will develop 2.67 gigawatts of natural gas power generation in Reeves County, West Texas, to supply a Microsoft AI data center under a 20-year agreement, with first power expected in 2028 and full capacity anticipated by 2031. The project connects Permian natural gas to growing AI electricity demand, creating potential opportunities for gas infrastructure, power equipment, automation, maintenance and water services.

Chevron will transfer its Hess Midstream stake and DJ Basin midstream assets in exchange for $200 million and revised contracts expected to halve its Bakken unit midstream costs, with closing targeted for year-end 2026. Hess Midstream will become an independent, multi-basin operator, while Chevron’s planned reduction from three Bakken rigs to two signals lower near-term drilling demand and greater emphasis on production efficiency.

Chevron plans more than $7 billion of Venezuelan investment over five years, adding Orinoco Belt acreage and targeting more than 600,000 bbl/d of combined JV production at costs below $20 per barrel. The expansion creates a significant multi-year OFS opportunity across drilling, heavy-oil production, artificial lift, pipelines, facilities, automation and infrastructure while highlighting the lower geopolitical risk associated with the U.S. “Safe Barrel.”

President Trump called on Chevron and other oil companies to lower retail fuel prices while criticizing Chevron CEO Mike Wirth for not recognizing the administration’s support for the industry. Chevron is also discussing a potential northern Iraqi pipeline route that could move oil to the Mediterranean while bypassing the Strait of Hormuz.

Chevron is prioritizing capital efficiency and free cash flow across its U.S. shale portfolio, maintaining Permian production above 1 million BOE/d while targeting 25% lower capital spending per barrel in 2026. Its 263 U.S. permits—including 92 in the Permian and 37 in the Bakken—provide a substantial drilling inventory, with 246 permits not yet showing an Activity Date.

Chevron has suspended production at its Petronius platform and evacuated offshore personnel as Tropical Depression Two approaches the U.S. Gulf of America. The storm could temporarily disrupt up to 2 million barrels of offshore oil production while placing one of North America’s largest production and refining regions on heightened weather alert.

Chevron has signed a 20-year agreement to supply natural gas-fired power to Microsoft’s AI data centers through its new Project Kilby, creating a potential new revenue stream beyond traditional oil and gas production. While the project’s initial earnings impact is modest, it could serve as a scalable blueprint for future AI data center power deals and provide Chevron with a much-needed long-term growth driver.

Chevron CEO Mike Wirth said Venezuela must lower taxes and royalties and provide greater fiscal clarity before the company will commit significant new capital to the country. While Chevron plans to increase production by 50% over the next two years using locally generated cash flow, broader investment will depend on reforms that improve returns for foreign investors.

Chevron is maintaining a disciplined strategy anchored to a $70 Brent planning assumption, optimizing the Permian for free cash flow while retaining the flexibility to shift back to production growth if market conditions justify it. Operationally, their YTD drilling activity reflects this approach, with 71% of wells concentrated in the Delaware Basin—primarily Lea and Eddy counties—and a strong reliance on Patterson rigs to execute a multi-rig, efficiency-focused development program.