Chevron Joins Lithium Race With 125,000-Acre Texas-Arkansas Deal

Chevron U.S.A., a subsidiary of Chevron Corporation CVX, announced its intention to enter the lithium market last week by acquiring lease rights to approximately 125,000 net acres spanning northeast Texas and southwest Arkansas.

The rights, acquired from TerraVolta Resources and East Texas Natural Resources, give the firm access to the Smackover Formation – a geologic unit rich in lithium-bearing brine.

"This acquisition represents a strategic investment to support energy manufacturing and expand U.S.-based critical mineral supplies," said Jeff Gustavson, president of Chevron New Energies.

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"Establishing domestic and resilient lithium supply chains is essential not only to maintaining U.S. energy leadership but also to meeting the growing demand from customers. This opportunity builds on many of Chevron's strengths, including subsurface resource development and value chain integration," he added.

The Smackover Formation is famous for its high lithium content and established infrastructure. The brine, a byproduct of oil and gas production, makes diversification particularly appealing for oil majors looking to expand into other markets without straying too far from their core expertise. The repurposing of these brine reservoirs presents both a low-carbon opportunity and a cost-effective path into the critical minerals sector.

Chevron plans to employ direct lithium extraction (DLE) technologies to process the brine. Unlike conventional methods, which rely on vast evaporation ponds that require months and consume large amounts of land and water, DLE utilizes advanced materials to extract lithium ions from brine selectively.

The technology promises a faster, more efficient extraction process with a smaller environmental footprint. While DLE is still an emerging technique, it's gaining traction among energy giants aiming to modernize domestic lithium production.

Through this effort, Chevron has joined another domestic oil major, ExxonMobil XOM, which is advancing its own DLE project in Arkansas through the subsidiary Mobil Lithium.

Exxon acquired 485 square kilometers of Smackover acreage in 2023 and aims to supply enough lithium for one million electric vehicles per year by 2030. The company has already inked a preliminary supply agreement with battery manufacturer SK On.

Despite lithium prices plunging from a high of $80,000 per ton in 2022 to around $8,400 today, the interest from Chevron, ExxonMobil, and others signals a longer-term bet.

These oil majors are acquiring lease rights and investing in capital expenditures during the market downturn, positioning themselves to be key suppliers when the rebound arrives.

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