Chevron Corp. has its hand in nearly every natural gas and oil producing basin on- and offshore around the world. But for the long term, natural gas development will be the driver, and U.S. shale plays offer “opportunities” to sustain organic growth, the company’s exploration and production (E&P) chief said last Monday.

George Kirkland, who heads the E&P unit for the San Ramon, CA-based major, spoke to analysts about the company’s plans, including shale prospects in the United States, during an investor conference held by the company’s management team.

Chevron now has “a very good queue” of shale assets but the company will continue to be “very selective” about where to invest development money, Kirkland said.

In a deal completed last month, Chevron paid an estimated $4.3 billion to buy shale producer Atlas Energy Inc. (see Shale Daily, Feb. 22; Nov. 10, 2010). The Pittsburgh-based independent provided Chevron with close to 486,000 net acres in the Marcellus Shale, 623,000 acres in the Utica Shale, and 370,000 acres in Michigan in the Antrim Shale (270,000 acres) and the Collingwood/Utica play (100,000 acres) (see Daily GPI, May 10, 2010). Atlas also had about 120,000 acres in the Chattanooga Shale of Tennessee and 123,000 acres in the New Albany Shale in Ohio.

Chevron is enthusiastic about the possibilities from the onshore shale gas resources it now has. However, Kirkland said gas prices “in the $6s and $7s” are needed over the long term to cover unconventional resource investment costs.

Increased drilling for unconventional gas and oil reserves in the United States is planned for the coming year, he noted. Chevron expects to raise total energy production by 1% this year over 2010.

This year about 70 wells will be drilled in the Marcellus Shale, he said. In addition Chevron also plans to start drilling for shale gas in Poland, where the company recently acquired a leasehold.

Chevron wants to raise total production 1% this year from 2010, and it will be assisted from its large unconventional resource base, according to Kirkland. Another big investment this year will be for liquefied natural gas projects in Australia.

“We continue to advance our major capital projects and we are on track to meet key project milestones,” he said. The “extensive new acreage” will drive growth.

“Longer term, our early, low-cost entries into new acreage will generate opportunities for further organic growth,” Kirkland said. “We believe this differentiates us from many of our competitors and will provide superior financial results.”

Gas investments top oil development in the coming year, CEO John Watson told analysts. The company has budgeted $26 billion for capital expenditures in 2011, which is almost 20% more than it spent in 2010. Nearly 40% of the total is to be directed to global gas projects.

Of the total budget, Chevron plans to spend close to one-third each in the Americas and in Asia (35% each), as well as 20% in Africa and 10% in Europe, Eurasia and the Middle East.

“We see the best opportunities to commercialize on our very large natural gas resource base that’s centered in Asia, while de-emphasizing the opportunities in the refining and marketing business, where for a decade we haven’t felt the returns quite as strong in that segment of the business,” Watson said in an interview on CNBC.