Chevron Tries to Cash in on Asian Resource Needs
Asia has recently expressed an increased need of energy resources. It has impacted the U.S. markets already, and energy companies are taking notice. Chevron has decided to utilize Asia’s needs as a way to make more money for the company. The Trefis Team explains how Chevron plans to do this.
Chevron doubles its bets on Asia
Chevron now holds more than half of its 150 trillion cubic feet of global gas reserves in the Asia Pacific region. [1] The Wheatstone project represents the company’s bullish view on demand for liquefied natural gas from Asian markets such as Japan, South Korea and China.
The natural gas reserves of Australia’s northern coast will see investments of more than $120 billion by international oil & gas firms, and the country is expected to overtake Qatar as the largest exporter of LNG by 2021. Shipping LNG from Australia is cheaper than shipping it from the Middle East and Africa for customers in North Asian countries like Japan.
Some analysts, however, point out that the rapid expansion of oil & gas companies in Australia has a downside risk. China, which is one of the fastest growing markets for LNG, is looking to open its shale reserves for exploration and has already held a round of auction for its shale gas blocks. [1] Shale gas exploration in the U.S. has resulted in a supply glut in the market and has suppressed natural gas prices for the past few years. China holds the world’s largest reserves of shale gas according to the EIA. Successful replication of the shale gas revolution in the U.S. could considerably lower gas prices in the Asian markets.
Will Chevron’s plan work? There seems to be mixed emotions about this, and analysts are skeptical. If Chevron plays their cards right it could really work, however, there have been glitches in plans before. Only time will tell.
Quotes taken from report by Trefis Team, Read the entire article here.
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