Chevron Corp. will wait until it has a firmer read on the trajectory of the COVID-19 pandemic and OPEC+ before resuming its ambitious plan to grow shale oil production in the Permian Basin.

The California oil titan had made its unique Permian position the cornerstone of future growth plans with aspirations to more than double production to 1 million barrels a day by the mid-2020s. But crashing oil prices last year forced Chevron, like its rivals including Exxon Mobil Corp., to halt these plans.

“We have paused in the Permian because the world doesn’t need more barrels and we didn’t want to spend more capital to add barrels into an oversupplied market,” Chief Financial Officer Pierre Breber said in an interview on Friday with Bloomberg TV. “But the resource is there and the opportunity is there when the conditions are right.”

With commodity prices rallying since the first vaccines were approved in early November, speculation is rife as to whether U.S. shale will resume fast-paced production growth and thwart OPEC’s carefully balanced plans to stabilize crude prices. Chevron, one of the Permian’s top two producers, appears to be sticking to the script.

“We need to get control over the pandemic and be on a pathway to a sustained economic recovery,” Breber said. “We need to see inventory levels get back to a more normal range and then we want to have an idea about what OPEC+ is going to do. They obviously have a lot of barrels curtailed right now.”

It could take until the second half of the year or even early 2022 before conditions are right for Chevron to increase investment in new drilling in America’s biggest oil field, Breber said.

Chevron has set its capital budget at just US$14 billion this year, which along with 2020 is the lowest in a decade and 65 per cent below its peak in 2014. The company has also slashed operating expenses, jobs and sold assets to help deal with the effects of the pandemic, which pushed oil prices to the lowest in a generation last year.

With those changes, Breber says Chevron can now fund its dividend and capital spending with Brent crude at less than US$50 a barrel. Last year, the company was forced to borrow heavily with its net debt-to-equity ratio rising to 22.7 per cent from 13 per cent at the end of 2019.