Chevron plans to increase output by a fifth in five years, driven by big Australian projects moving gas to energy-hungry Asian markets, while it also tries to squeeze another $150 million in cost savings out of its refining arm.

Closer to home, in the Marcellus shale, the second-largest U.S. oil company said reservoir outcomes were exceeding expectations, although it was investing there at a "measured pace" in light of depressed North American natural gas prices.

After getting $850 million of savings from a multi-year restructuring of its refining and chemicals division, compared with $700 million originally planned, Chevron said it was now looking for a total of $1 billion in savings.

It is reducing the number of countries served by its marketing operations; it sold its UK refinery last year as well as a New Jersey terminal last month.

George Kirkland, executive vice president for upstream and gas, saw ample demand for its coming flood of Australian liquefied natural gas (LNG) since it will be sold in Asia, which does not have the same glut as North America.

"LNG is a replacement energy for coal or oil or nuclear and it really doesn't have any direct gas-on-gas competition, apart from other LNG," Kirkland said at a meeting with analysts in New York. "All these markets are different."

A new Angolan LNG project with peak capacity for 175,000 barrels of oil equivalent per day (bpd) should start shipping next quarter and, while contracts with Angola's government are not finalized, Chevron expects the gas to go to Europe and Asia.

New onshore gas sources, opened up through new drilling techniques and hydraulic fracturing, have been found in other countries. Chevron started an initial well this quarter in China, where it is exploring 940,000 acres with Sinopec , and in Poland, where it just started up a second shale gas well.

Larger rival Exxon Mobil had cast some doubt on Polish shale gas prospects after its first two wells there did not find commercial quantities.

Brazil Dispute

A November leak of about 3,000 barrels of oil off Brazil led to a huge lawsuit against Chevron, which has also had its staff threatened with financial and criminal penalties.

Asking to be treated "fairly," Chief Executive John Watson said that the company stopped the oil leak in four days and that Chevron staffers had been forthcoming with the Brazilian authorities.

"We regret the incident, but there wasn't damage, and we expect to be treated as Petrobras or other companies would be treated in a similar circumstance," Watson told reporters after the presentation to analysts.

Overall, Chevron stuck with its production target of 3.3 million barrels per day by 2017, assuming oil prices of $79 per barrel, up from its anticipated output of 2.68 million bpd this year.

The start of its investment-heavy projects would allow the company to reduce cash on its balance sheet, Chevron said, as analysts sought clues on potential dividend increases.

Chevron also said it planned to hold onto its West Coast refineries at a time when others are pulling out, including rival BP, which has put its Southern California refinery up for sale.