The administration of U.S. President Donald Trump has announced plans to expand drilling for crude oil and natural gas within the Alaskan wilderness.
The U.S. Department of the Interior has begun implementing plans to expand energy and mineral resource production in Alaska. President Trump has promised to “unleash Alaska’s extraordinary resource potential” and was elected on a promise to let oil and natural gas companies “drill, baby, drill.”
The Interior Department and Bureau of Land Management are reopening 82% of the National Petroleum Reserve-Alaska to leasing and energy project development. They also plan to open the entire Coastal Plain of the Arctic National Wildlife Refuge to oil leases and will restart the Alaska LNG Project.
The expansion of Alaska territory to energy development is seen as positive news for leading oil and natural gas companies such as Exxon Mobil (XOM), Chevron (CVX), and Occidental Petroleum (OXY).
Environmental Criticism
The actions kickstart a regulatory review process that includes lengthy comment periods, as well as proposed and final rules by the U.S. federal government. Environmental organizations were quick to criticize the move, with the Sierra Club saying, “Donald Trump believes Big Oil CEOs, billionaires, and corporate polluters should benefit from America’s public lands, not we the people.”
The announcement came a day after Trump met at the White House with the American Petroleum Institute and the heads of the largest U.S. oil companies. Previous U.S. President Joe Biden had banned drilling on 28 million acres of Alaskan federal lands. Trump is moving to reverse that ban.
The 23-million-acre National Petroleum Reserve-Alaska is estimated to hold 895 million barrels of crude oil. There is also believed to be $44 billion worth of natural gas in the Alaska reserve area.
Is CVX Stock a Buy?
The stock of Chevron, one of the leading U.S. oil majors, has a consensus Strong Buy rating among 14 Wall Street analysts. That rating is based on 11 Buy and three Hold recommendations assigned in the past three months. The average CVX price target of $176.64 implies 7.32% upside from current levels.
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