HOUSTON Chevron Corp plans to take a measured approach to shale gas development despite a flurry of deals in the past year and the industry's huge ambitions for the emerging resource.
The second-largest U.S. oil company added 228,000 acres in the Marcellus shale in May to follow up on its $3.2 billion acquisition of Atlas Energy, which gave Chevron its first big stake in the northeastern U.S. field.
That followed the $30 billion purchase of leading gas producer XTO by larger rival Exxon Mobil Corp, which moved the discussion of shale development to center stage among both industry players and policymakers.
"You're not going to see Chevron -- I can't speak for others -- just shift the whole business into shale, and let other things go," Bobby Ryan, Chevron's vice president for global exploration, said at the Reuters Global Energy and Climate Summit in Houston on Wednesday.
XTO President Jack Williams told the summit the previous day that his company was taking advantage of low natural gas prices to snap up acreage in shale basins around the United States.
Ryan reiterated that Chevron's focus areas remained the Gulf of Mexico, West Africa and Western Australia, which were all part of a "balanced portfolio" approach to exploration.
"Shale is just one more piece of that portfolio," he said. "Do we sit around the table, shuddering a bit reacting to headlines? No. I think you've seen from us a very measured approach."
Like Exxon and others, Chevron is exploring shale acreage in Eastern Europe, and will drill its first well in Poland this year. A recent trip there reminded Ryan of the project's scale.
"You know how long it takes to drive a million acres?" Ryan said of his tour of Chevron's acreage there. "You can only look at Google Earth so much. You get a sense of the countryside and the people and the villages, and meet a lot of the officials."
He acknowledged that success in Eastern European shale would require massive infrastructure investments, since the region was not set up for it.
"That's something we'll all have to address," he said. "I'd like to believe, from an industry perspective, we've done it before, we'll be able to do it again."
Ryan declined to address comments last week from Russia's Rosneft on Chevron exiting their Black Sea project, except to say discussions continued.
"It's really no different than what we've done in other places: get together, talk about opportunities. Sometimes they mesh, sometimes they don't," he said. "That's what happens everywhere from there to the Gulf of Mexico."
In the U.S. Gulf, Chevron recently got clearance for a few wells already under development, and its program includes 10 development and exploration plans and 15 drilling permit applications in "various stages" of approval or preparation.
Increased scrutiny from U.S. regulators after last year's massive Gulf oil spill led to delays in permit awards, which have started to pick up in the past few months.
"I think it's a combination of a set of new rules that not everybody understands on both sides," Ryan said. "It's not near the pace that we would like yet."
As for fluctuations in oil and gas prices, the executive said his 32 years of experience had taught him to plan on a far longer time scale when exploring for hydrocarbons.
"We pick up leases in times of high prices and times of low prices," Ryan said. "We have about a billion barrels a year produced, so exploration activity now may not come on production for 10, 15, 20 years."