Chevron seeks to expand refinery, boost output

NEW YORK — Chevron Corp. said Tuesday its oil and natural gas production would rise by 600,000 barrels per day by 2010 — slightly below some analysts’ expectations — and it announced plans for a possible major expansion of a Mississippi refinery.

Chevron CEO David O’Reilly also estimated that Gulf of Mexico production snags related to last summer’s hurricanes would trim $500 million from the company’s bottom line in 2006, compared with a reduction of $1.4 billion in 2005.

Chevron, the country’s second-largest petroleum producer, told Wall Street analysts concerned about the company’s growth that daily output would rise from 2.5 million barrels per day of oil equivalent in 2005 to 3.1 million barrels per day by 2010. By 2008, daily output would be about 2.9 million barrels per day.

“We as a company are doing a lot about supply,” O’Reilly said in response to a reporter’s question about the criticism the industry has faced from Congress over soaring gasoline prices and tight supplies.

However, part of Chevron’s growth will come from production and reserves that it gained through its recent $18 billion acquisition of Unocal Corp.

Oppenheimer & Co. oil analyst Fadel Gheit said “the outlook is significantly better than the recent past,” calling Chevron’s production growth forecast of 3 percent per year through the end of the decade “very decent.”