Chevron returns to frontier oil exploration after years of cutbacks

Chevron targets new basins in Africa, South America and eastern Mediterranean

Chevron, the largest U.S. oil company behind ExxonMobil, is back on the hunt for oil and gas in far-flung, undeveloped regions after years of cutting spending on frontier exploration and drilling close to home. The company is rolling in cash after the Iran war spurred a historic disruption in energy markets that sent oil prices — and its profits — soaring.

Chevron reported more than $14 billion in profits for the first half of the year, already topping its earnings for all of 2025, and it is expected to report another blockbuster quarter on Friday. Wall Street analysts see third-quarter profits nearly tripling from a year earlier, according to FactSet.

The man leading the charge is Kevin McLachlan, a veteran oil explorer from Canada with a degree in geophysics and a fondness for biking up and down hills in France. Chevron poached him from TotalEnergies, the French oil company known for doing business in remote outposts where some U.S. companies have feared to tread. McLachlan joined Chevron last year to boost exploration in undeveloped regions of Africa, South America and the eastern Mediterranean, and he oversaw exploration at Total when it made big discoveries in Namibia, Suriname, Cyprus, South Africa and elsewhere. He says biking and exploring for oil scratch similar itches — the urge to find new roads and see what’s around the next corner.

“Exploration is a difficult game,” he said. “There’s nothing greater than those moments when the discovery happens.”

The expansion comes at a political moment that favors oil exploration and further investment. The war with Iran laid bare the vulnerability of the energy supply chain, when about 20% of the world’s supply of oil and gas was effectively trapped behind the Strait of Hormuz. In the Trump era, investor pressure to diversify away from fossil fuels — prevalent after the onset of the Covid-19 pandemic — has largely dissipated, and Chevron executives said predictions that global oil demand would soon peak have been pushed back by many years.

Oil companies have seized the moment: Exxon, Shell, Total and other big players have turned to places such as Suriname, Brazil and Namibia for new discoveries. Chevron had spent years moving the other way. As Exxon made major oil discoveries in Guyana in the 2010s, Chevron scaled back, focusing on expanding its operations in well-known regions like the Permian Basin of West Texas and New Mexico. For years the industry failed to fully replace the oil reserves it pumped into the global market; Chevron’s reserve replacement ratio in 2024 was negative 4%, meaning its proved reserves declined by more than the volume of hydrocarbons it produced. The company pumped record amounts of crude but sold off Canadian assets that year.

Chevron’s $53 billion purchase of Hess — motivated in large part by the company’s 30% stake in the Exxon-led Guyana consortium — helped it catch up, boosting its reserve replacement ratio to 158% last year. The deal, which was in limbo for nearly two years following a challenge from Exxon, was transformative: before it closed, investors had worried Chevron’s oil-and-gas portfolio would look thin after 2030. But investors want to see the oil giant dig up new finds of its own and keep replacing barrels consistently, and the integration of Hess’s exploration team and the hiring of McLachlan were seen across the industry as a sign that the company was serious about turning the tide.

Mike Wirth, Chevron’s chief executive, said last year that he was unhappy with the company’s exploration results in recent years. “We pulled back and focused into a pretty narrow range of activities,” Wirth said on a conference call with analysts. “Exploration needs to play an important role.”

Now Chevron is providing more details about its plans to replace its resources. Among other moves, the company is renewing its push to scour the ocean depths for oil, looking to acquire new fields to drill and using new technology to wring more crude from the earth. McLachlan said half of the company’s exploration capital is now spent in frontier basins, or those that are undeveloped, up from roughly 20% a few years ago. Its goal, he said, is to drill up to 20 wells a year, with about half of those targeting new basins with the potential to become major new developments. The effort relies on vastly improved seismic imaging and artificial intelligence tools that can sift through a century’s worth of geological data to help pinpoint potential hot spots.

“It puts data and information in the hands of our geologists and explorers in seconds,” said Ryder Booth, Chevron’s chief technology and engineering officer. Booth credited technological advances with unlocking most of the world’s new oil-and-gas resources since the turn of the century; one of Chevron’s key areas of research is advanced chemicals, which it uses to boost recovery of oil-and-gas molecules from its existing fields in places like the Permian.

This year, Chevron is drilling a second exploration well in the promising PEL 90 block in Namibia. It is drilling in Egypt, taking a closer look near its assets in Israel and inking deals to set up efforts in Greece, Malta and Syria. It is also investing in seismic imaging to explore in Uruguay and Brazil.

Jake Spiering, Chevron’s president of corporate business development, said the company isn’t looking to grow just for the sake of growth as it scouts out potential acquisitions and manages relationships with governments in Iraq, Argentina and Venezuela. “We try to take a long view,” Spiering said. “Our job is to be apolitical and make sure that we are trying to do the best thing for our shareholders.”

Chevron is hoping for exploration wins, but McLachlan warns it can take years to see a successful exploration effort through — and that it’s easy to walk away from a project just before it hits the jackpot. “When you drill dry holes, they all hurt,” he said. “It’s healthy to step back and challenge [ourselves]. Should we continue? Should we walk away? It’s probably the most difficult question in exploration. And not everybody gets it right.”