Hess Acquisition Uncertainty
Q: Why not close the Hess deal now if confident in legal position?
A: Chevron is proceeding with the Hess acquisition as per the deal structure, which includes conditions precedent like concluding any arbitration. Integration planning is going well, but they will execute the transaction as written. They acknowledge the timing is unfortunate but are confident in their legal position.

$2–3 Billion Cost Savings Plan
Q: How will you achieve the $2–3 billion cost savings?
A: The cost savings program includes portfolio actions like asset sales (e.g., Canada, Alaska, Congo) and improvement initiatives across the organization. The first $2 billion comes from firm plans, while the additional $1 billion is an aspirational target from ongoing initiatives. Savings will be realized over the next few years, with full benefits by 2027.

Future CapEx Plans
Q: Is CapEx expected to decline materially in coming years?
A: Chevron's CapEx has already reduced from $40 billion a decade ago to around $18.5 billion today. As major projects like TCO conclude, affiliate CapEx will come down next year. They plan to stay disciplined, with an unchanged guidance range of $14–16 billion, and will provide more details after completing their business plan.

Sale of Canadian Assets
Q: Why sell Canadian assets if adding long-cycle resources like Hess?
A: The sale of the Canadian assets was opportunistic; the buyer made an attractive offer for both the Duvernay and AOSP assets. While Chevron values long-cycle assets, they continually high-grade their portfolio and were willing to divest non-core assets at fair value.

Permian Basin Outlook
Q: Can you discuss Permian growth and future focus?
A: Chevron's Permian production remains strong, with new wells outperforming expectations. As they approach 1 million barrels per day next year, the focus will shift from growth (which has been around 15% CAGR) to maximizing free cash flow. Capital spending in the Permian is expected to decrease, emphasizing efficiency and productivity gains.

Balance Sheet and Shareholder Returns
Q: How does the balance sheet support shareholder returns amid volatility?
A: Chevron maintains a strong balance sheet with net debt under 12%. They are comfortable using the balance sheet to support shareholder returns, including a share repurchase run rate of $17.5 billion. Their financial priorities focus on sustaining and increasing the dividend, reinvesting in organic projects, maintaining a strong balance sheet, and returning excess cash to shareholders.

TCO Startup Progress
Q: Is TCO startup largely de-risked now?
A: Chevron is making great progress at TCO, delivering predictable commissioning and startup activities. While significant complex commissioning work remains, every quarter reduces risk. Key milestones have been achieved, and they're on track to begin startup procedures in the first quarter, with cost and schedule guidance unchanged.

California Downstream Operations Impact
Q: How are California policies affecting your refineries?
A: Chevron criticized California's policies, stating they discourage investment and constrain supply, potentially leading to higher prices. While their California refineries are competitive and have operated for over a century, Chevron will continue to evaluate options but noted it's tough to justify new investments in that system.

Gulf of Mexico Opportunities
Q: How is technology unlocking new resources in the Gulf?
A: Advancements like the 20,000 psi technology at the Anchor project open up opportunities in ultra-high-pressure fields. About 20% of Chevron's exploration portfolio requires such capabilities. They're also using ocean bottom node seismic and AI tools to improve exploration and development, indicating significant remaining potential in the Gulf of Mexico.

Eastern Mediterranean Operations
Q: How are current events affecting operations in the East Med?
A: Safety is the first priority. Expansion projects at Tamar and Leviathan have faced delays due to contractor demobilization amid regional risks. Despite this, Chevron expects to complete these projects late next year and is meeting all supply commitments to customers.

Turnaround Performance Improvements
Q: Are turnaround successes at TCO and Gorgon repeatable?
A: The improved turnaround performance is due to process enhancements, rigorous scope management, use of digital tools, benchmarking, and expertise sharing. For example, the Gorgon Train 2 turnaround was a 14% improvement in duration, and 8 out of 9 turnarounds met first quartile duration targets, indicating repeatable success.

LNG Market Outlook
Q: What is the LNG market outlook and your exposure?
A: LNG demand is growing, but high inventories suggest that 2025 may not be tight. Chevron's LNG portfolio is over 80% contracted, primarily on oil-indexed pricing with long-term contracts to North Asia. They have less than 20% spot exposure, mainly from West Africa.

DJ Basin Potential
Q: Are there opportunities for scale in the DJ Basin?
A: Chevron is pleased with the DJ Basin's performance and integration of acquisitions. They have become the largest operator there, with production expected to remain at 400,000 barrels a day through the end of the decade. While further acquisitions aren't a priority, they focus on driving value from the asset.

Chemicals Business Performance
Q: What's driving the improvement in the chemicals business?
A: Polyethylene chain margins have strengthened over the year due to supply disruptions and steady demand growth. Chevron Phillips Chemical (CPChem) benefits from competitive ethane-based feedstocks. Despite previous market oversupply, margins are improving, and long-term fundamentals are viewed positively.

Cost Reductions and Relocation
Q: Does relocating to Texas affect cost reductions?
A: The relocation is not seen as a threat to cost reductions. Chevron is thoughtfully migrating work over time, utilizing technology, and considering different locations, including global capability centers. The goal is to improve efficiency without disrupting operations.

Permian Non-Operated Interests
Q: Is there a two-speed system in Permian operations?
A: Chevron has seen strength across all three components of their Permian business: operated, joint venture, and royalty interests. While performance varies, there's no significant variation to suggest a two-speed system among operators in the basin.