June 17 (Reuters) -

Chevron ( CVX ) said on Tuesday its has acquired on lease

about 125,000 net acres in northeast Texas and southwest

Arkansas, marking the entry of the U.S. oil major into domestic

lithium production.

Energy giants, including Exxon Mobil ( XOM ), have been

looking to leverage their expertise in drilling and brine

processing to enter the lithium market and support the energy

transition.

Demand for lithium - a key component in batteries for

electric vehicles and renewable energy storage - remains strong

even amid a prolonged supply glut and price weakness.

"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.

Chevron ( CVX ) said it acquired leasehold acreage positions from

TerraVolta Resources and East Texas Natural Resources, but did

not disclose financial details of the transaction.

The company would use the direct lithium extraction to

extract the element from brines produced from the subsurface.

(Reporting by Arunima Kumar and Vallari Srivastava in

Bengaluru; Editing by Arun Koyyur)