Chevron says oil, gas output to jump 20% by 2017

(chevron) -- Chevron said Tuesday its oil and gas production will inch up this year but it expects output to jump 20% in five years as massive liquefied natural gas (LNG) projects in Australia commence operations. Chevron officials noted that annual production could vary depending on oil prices.

During the company's annual meeting with analysts in New York, Chevron executives said production will rise 0.26% to 2.68 million bpd of oil equivalent this year, and to 3.3 million bpd of oil equivalent by the end of 2017.

Those estimates are up from 2.67 million bpd of oil equivalent it produced in 2011. The 2017 projection is based on an oil price average of USD79/bbl, the company said.

Chevron, based in San Ramon, Calif. and the second largest US oil company by market value after ExxonMobil, said annual production could vary depending on oil prices. The company has in place several share production sharing contracts with foreign governments that give more production to national oil companies - and less to international oil companies - when oil prices rise.

Light, sweet crude oil for April delivery on the New York Mercantile Exchange was 30 cents lower, at USD106.04/bbl, in a range of USD105.85 to USD107.13/bbl. Chevron's future growth will be driven by a handful of large oil and gas projects worldwide. The liquefied-natural-gas Gorgon project in Australia is on track to start production in 2014 and still expected to cost USD37 billion, the company said.

Construction of development wells is expected to start this year.