Chevron's $55B Oil Grab Just Got Juicier--But There's a Wild AI Twist

This article first appeared on GuruFocus.

Chevron (NYSE:CVX) could be entering its investor day in New York with the kind of momentum investors have been waiting for. After sealing its $55 billion acquisition of Hess earlier this yeara move that ended months of arbitrationCEO Mike Wirth is now expected to outline how the company plans to turn that deal into sustained growth. The takeover brought Chevron a 30% stake in Guyana's Stabroek block, operated by Exxon Mobil (NYSE:XOM), which holds an estimated 11 billion barrels of oil equivalent and played a major role in its record third-quarter production. Portfolio managers, including BlackRock's Will Su, believe the Hess addition may give Chevron the scale and flexibility it previously lacked, as Wirth prepares to issue long-term guidance through the end of the decade.

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The conversation now shifts to what Chevron does with all that firepower. Production from the Permian Basin has hit one million barrels a day, and Kazakhstan's Tengiz expansion is running at full tiltboth turning into cash machines just as capital spending winds down. With a leaner cost base and two mega-projects behind it, analysts at American Century Investments say Chevron may be positioned to redirect more capital toward exploration without cutting into shareholder returns. Dividend protection and buybacks remain central to the story, underscoring Wirth's disciplined capital-allocation playbook.

But there's a new twist emerging. Chevron is in talks with major AI firms about supplying natural-gas power for data centersa potential bridge between old-world hydrocarbons and the digital economy's energy hunger. The strategy has some investors intrigued and others cautious, questioning whether it marks innovation or distraction. Meanwhile, negotiations to extend the company's Kazakhstan contract beyond 2033 are under way, a complex process Wirth says will take time. For investors, this week's meeting could reveal whether Chevron's next growth chapter will stay rooted in traditional oil or expand into powering the AI age.

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