Chevron is in the "enviable position" of being selective in making acquisitions, Chairman John Watson told CNBC Tuesday.
Chevron's last "modest acquisition" was Atlas Energy in February for $4.5 billion. "When we make investments of that sort," Watson said, "we want to make sure they give us the right returns. We'll invest in leases, we’ll buy discovered resources and we’ll buy companies, but that will happen over time and it will happen at a measured pace."
Instead, the company is investing in its exploring and production of oil and gas as well as its refining operations. Chevron has a $26 billion capital expenditure program this year, which is up 20% from last year and exceeds the company's $19 billion in earnings.
He attributed the current $108 a barrel oil on a "recovering economy where demand is growing" and "policies around the world that aren’t necessarily expanding supply to keep up with that demand. So surplus capacity is shrinking and prices are rising. We also have the pressure of uncertainty" given events in the Middle East.