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Chevron Corp says it is truggling to produce more oil and natural gas. Production levels last year were the lowest since 2008.


http://au.finance.yahoo.com/news/Chevron-struggling-produce-aap-2947334588.html?x=0

Chevron Corp, which has spent more than $20 billion ($A18.7 billion) a year since 2007 scouring the globe for new resources, says it is struggling to produce more oil and natural gas. Production levels last year were the lowest since 2008.

The company still expects to supply more oil in the future, but its troubles last year highlight the many hurdles the industry faces as industrial and developing nations crave more oil to grow their economies.

The US predicts that oil producers will fall behind as global demand ratchets up. The Energy Information Administration estimated that the world used 88.1 million barrels of oil per day in 2011 while producing only 87.6 million barrels per day. It sees the trend continuing this year and next. Oil and gasoline prices are expected to rise as countries dip into stockpiles to cover shortfalls.

"Can we meet demand? Maybe. But doing so is going to be more challenging and expensive," Argus Research analyst Phil Weiss said.

Part of the drop in Chevron's 2011 production can be explained by contracts with foreign governments that limit the amount of crude that Chevron can keep as prices rise. Chevron also is dealing with a rash of troubles.
There were pipeline problems this year in Thailand, tropical storms in the Gulf of Mexico and equipment issues in the United Kingdom.

An offshore oil leak put Chevron at odds with the Brazilian government. Regulators there forced Chevron to shut down one of its offshore wells, and prosecutors are seeking $10.6 billion in damages. Chevron has voluntarily suspended plans to further explore the country's oil-rich offshore region.

The company also is in an ongoing battle with Ecuador over environmental damages.