(FORTUNE Magazine) – I'm doing a lousy job, confesses the boss. "I stand up there before an audience, and I sound just like a big damn oil mogul. I sound like the tobacco companies ten years ago. I haven't figured out how to get this message across." That's a pity, because Ken Derr (rhymes with "burr"), CEO of Chevron Oil Corp., could be something of a modern Paul Revere. His clarion is no less valid because it's exactly what you might expect from a big oil mogul. His message: The huge trade deficit that America is accumulating will rise up and bite us any minute. The U.S. is spending more than $1 billion a week to import oil. That bill is swelling steadily. Everybody worries about the $40-billion- a-year trade deficit that we run with the Japanese. Why doesn't anybody talk about the more than $50-billion-a-year deficit that we run on oil? Why doesn't anybody warn that we're endangering our security because we depend for so much of our oil on the combustible Middle East? No, we can't wipe out the energy deficit entirely -- but we sure could bring it down by developing our own remaining sources of oil. "Every country in the world," says Derr, his words bouncing off the walnut walls of his stadium-size office atop Chevron's San Francisco headquarters, "is doing everything they can to develop their own natural resources. Every country in the world, except one."

You could argue, as does the chief of America's fourth-largest energy company (1993 sales: $32 billion), that the U.S. is doing everything it can to discourage the domestic oil industry. So, like just about every other big oil manager, Derr, 58, is regretfully and reluctantly doing what he considers the logical thing: He's shifting investment out of the U.S. and into more hospitable countries. Right now he's betting a large part of his company's future on a $750 million investment in one of the chanciest areas in the world: Kazakhstan. Kazakhstan? The country on the landlocked Caspian that broke off from the old Soviet Union? "People say, 'Have you lost your mind, Ken? Why are you willing to spend money in Kazakhstan, with all that political instability?' And I tell 'em, 'Have you ever tried to do business in Santa Barbara County?"' Or just about anywhere else in the U.S. . . . One example: Chevron had to wade through three years of wasting negotiations with Florida and federal authorities before it was permitted to punch a natural gas well 30 miles offshore that nobody can see from the shoreline. "Yeah, we're drilling there now, but boy, I'll tell you, we never, never had to fight harder." The company wants to drill more in Alaska but can't because of federal and state restrictions, what Derr calls "the wholesale lockup of new energy prospects on public lands." He says, "I would love to spend more money looking for oil in the United States. But how long are you going to keep banging your head against the wall?" So, since he became CEO five years ago, he has raised spending on foreign exploration and production by 50%, and, sadly, cut his company's domestic work force by more than 19% -- a loss of 8,500 jobs. Half Chevron's spending used to be in the U.S.; now only a third is, and soon only a quarter will be. The company is sending explorers and drillers to some risky places. Like Angola, where a civil war has raged for two decades, but, says the CEO, they only kill each other and are smart enough to let the oilmen alone to develop local wealth. Or Nigeria, Albania, Papua New Guinea, and Colombia, where the gringos are welcomed as by far the world's most technologically advanced oilmen. Or China, where even the communists value the role of capitalist development. Or Kazakhstan. Here's the way Derr, in his staccato manner, describes that wild frontier: "Kazakhstan, good country. Separate, independent country. Smaller than Russia, 17 million people. I think they can make it. They're struggling like mad. Very strong leader, very strong. I'm glad I'm there. Problem, getting the oil to a market. We have to get the oil exported to get dollars. We don't really want to send our shareholders rubles for dividends." The windswept desert field there holds an estimated six billion to eight billion barrels -- "Prudhoe Baysize," says Derr. Chevron owns half of it, which should be good for three billion to four billion barrels. That stands to double the company's existing reserves of three billion barrels. Trouble is, a pipeline will have to be built to get it out, and that will cost another $1 billion-plus. Three countries are partnered to build it: Kazakhstan, Russia, and Oman. They often get along like brothers -- Cain and Abel. Says Derr: "Russia doesn't have any money. Kazakhstan doesn't have any money. Oman has money, all right, but they don't want to spend it." So Chevron is negotiating to help bankroll the pipe. For all the problems and posturing, Derr is confident that sometime between 2005 and 2010 the field will be producing a huge 750,000 barrels a day, enough to meet all the oil - needs of New York State. "This," says he, " is the kind of opportunity that comes along only once in a generation." For now, Chevron is producing small quantities of oil in Kazakhstan and selling it to the Russians in one of those complex barter deals you will be seeing more of in our global economy. First, Chevron sends the oil into the Russian pipeline system, where it is routed to nearby refineries. Then the Russians pay for it by delivering their own oil to Chevron in Poland, Hungary, and the Czech republic, and the company exports it to countries that pay in hard currencies. The Russians are difficult to deal with, says Derr. Now they're demanding extortionate fees -- reports range from 25% to 60% of the oil's price -- just to let the crude flow through a pipeline on Russian territory. But, heck, it still beats trying to do business in Santa Barbara County. For all those folks back home plumping for more restrictive energy- conservation measures, Derr has a few messages. The world is not running out of oil: Known reserves have jumped from a 20-year supply in 1950 to a 50- year supply now. Gasoline is less polluting than you think: New cars produce 96% fewer tailpipe emissions than 1960 cars did. Air pollution is not going up but dramatically down; since 1970, emissions have declined by 59% (for particulates), 31% (volatile organic compounds), 25% (sulfur dioxides), and 41% (carbon monoxide). The best future fuel, in his view: reformulated, even less polluting gasoline.

WHETHER you agree with Derr or not, you have to concede that shifting out of the U.S. paid off for his company. First-half profits were up 17% despite a soft second quarter, mainly because of refinery problems. And early this year, Derr gave every surviving employee a 5% bonus and a gold-decorated watch to celebrate a goal achieved: Over the past five years Chevron stockholders had an average annual return of 18.9% from dividends and price appreciation -- highest among the nation's top six oil companies.