Michael Wirth, CEO of Chevron.

Adam Jeffery | CNBC

Chevron‘s plans to boost its buyback program by $1 billion depends on the oil giant winning a battle with Occidental Petroleum to take control of Anadarko, the company’s chairman and CEO, Michael Wirth, confirmed Friday.

The oil major announced plans to hike the shareholder payout to $5 billion per year when it disclosed a deal earlier this month to buy Anadarko for $33 billion. Less than two weeks later, Occidental put a higher bid on the table.

Before the announcement, Chevron had planned to repurchase $4 billion worth of shares from investors each year, up from a previously announced $3 billion buyback program.

“The step up to $5 [billion] was a signal that this deal makes us even stronger,” Wirth told analysts during a conference call Friday.

“It was an announcement we made to indicate our strong confidence in the cash flow accretion and value creation that this transaction enables, and so it is tied to the transaction.”

Chevron suspended the purchases in the first quarter because it cannot buy back shares when it possesses important nonpublic information — in this case the pending Anadarko acquisition — said Chief Financial Officer Pierre Breber. He said the company probably won’t purchase any shares in the second quarter due to other restrictions related to the merger process.

Once the transaction is complete, Chevron intends to resume the purchases at a rate of $1.25 billion each quarter, he said.

In light of Occidental’s rival bid, Wirth said the timeline to close the deal “is probably a little different today than I would have told you a couple of weeks ago.” However, he still thinks it could be completed in the third quarter.

Occidental is offering $76 a share for Anadarko, topping Chevron’s $65 per share bid and sparking speculation that the oil major may have to sweeten its offer. On Friday, J.P. Morgan analyst Phil Gresh asked if there is a price level at which Chevron would back out of the deal, should Anadarko shareholders seek a higher bid.

“Of course the answer to that is yes there is,” Wirth said. “This isn’t the time to address that specifically, but we’ve said we will do things that are value-creating for our shareholders. And we don’t need to do anything. We’ve got a very strong story without doing a transaction.”

Chevron executives say they’re confident they will prevail and can bring more value to Anadarko’s assets.

Occidental CEO Vicki Hollub has pitched her company as a high-performing driller in the Permian Basin that can squeeze the best results from Anadarko’s acreage in the area, the top U.S. shale oil region.

Shares of Chevron were down about 1.7% on Friday after the company reported that first-quarter profit fell 27% from a year ago, dinged by lower oil prices and weak refining margins.