Chevron needs oil, as stated in the quarterly report wordwide production was down 3%. That might not sound like a lot, but in terms of houndreds of thousands of barrels, believe me it is quiet a lot. There is many new projects coming on line in the coming years, but not fast enough to stop the continuing fall of oil production. Cash heavy money making machine, Chevron will be forced to buyout yet another oil company, just to maintain production and keep the stockholders happy. Wonder who that will be, Marathon, Devon, Apache, Oxy...my bet is either OXY or Devon. Look for this to happen in the early part of 2009...IMO. Debate welcome.
Slide 7 summarizes the change in worldwide oil equivalent production, including volumes produced from oil sands in Canada. Production fell by 62,000 barrels per day, or 2% between quarters. U.S. production declined 13,000 barrels per day due to operational down time and normal field declines that I mentioned.
Outside the U.S., overall production dropped 49,000 barrels per day in the second quarter. However, we estimate that the impact of higher prices reduced production by about 75,000 barrels per day between sequential quarters. So absent price effects, volumes would have been up between quarters. I’ll elaborate on this in a moment.
Indonesia production was impacted by prices but the largest effect was the absence of the one-time benefit of a favorable gas unitization agreement that we discussed on the conference call last quarter.