Chevron announces $14bn capital, exploratory budget for 2021

Michael K. Wirth
Michael K. Wirth

CHEVRON Corporation has announced a 2021 organic capital and exploratory spending programme of $14 billion. The company has also lowered its longer-term guidance to $14 to $16 billion annually through 2025. It said that this capital outlook would continue to prioritize investments that are expected to grow long-term value and deliver higher returns and lower carbon, including more than $300 million in 2021 for investments to advance the energy transition.

Michael Wirth, chairman and chief executive officer, CEO, Chevron, says that the company remains committed to capital discipline with a 2021 capital budget and longer-term capital outlook that are well below its prior guidance. “With our major restructuring behind us and Noble Energy integration on track, we’re prepared to execute this program with discipline,” he said.

Chevron’s capital guidance of $14 to $16 billion annually from 2022 to 2025 is significantly lower than its previous guidance of $19 to $22 billion, which excluded Noble Energy. During this time period, as capital is expected to decrease for a major expansion in Kazakhstan, the company expects to increase investments in a number of Chevron’s advantaged assets, including its world-class position in the Permian, other unconventional basins, and the Gulf of Mexico.

Wirth said: “Chevron is in a different place than others in our industry. We’ve maintained consistent financial priorities starting with our firm commitment to the dividend. We took early and swift action at the beginning of the pandemic to prudently allocate capital, reduce costs, and protect our industry-leading balance sheet. And we’ve completed a major acquisition and restructuring that positions our company to deliver higher returns and grow long-term value.”

In the upstream business, approximately $6.5 billion is allocated to currently producing assets, including about $2 billion for Permian unconventional development. Approximately $3.5 billion of the upstream program is planned for major capital projects underway, of which about 75 percent is associated with the Future Growth Project and Wellhead Pressure Management Project (FGP/WPMP) at the Tengiz field in Kazakhstan. The remaining $1.5 billion is allocated to exploration, early-stage development projects, and midstream activities.

Chevron Corporation is one of the world’s leading integrated energy companies. Through its subsidiaries that conduct business worldwide, the company is involved in virtually every facet of the energy industry. Chevron explores for, produces, and transports crude oil and natural gas; refines, markets, and distributes transportation fuels and lubricants; manufactures and sells petrochemicals and additives; generates power, and develops and deploys technologies that enhance business value in every aspect of the company’s operations.

– Dec. 4, 2020 @ 14:25 GMT |

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