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Chevron to Keep Spending Flat at $14B in 2021; Spend $2B in the Permian

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   |    Thursday,December 03,2020

Chevron Corp. has announced a 2021 capital plan of $14 billion (flat compared to 2020).

Included in its 2021 spending is over $300 million for investments to advance the energy transition.

Upstream Investments:

• $6.5 billion is allocated to currently producing assets, including about $2 billion in the Permian (up from $1.5B in 2020)

• Approximately $3.5 billion is planned for major capital projects underway (~75% 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

CEO Michael Wirth said: "Chevron remains committed to capital discipline with a 2021 capital budget and longer-term capital outlook that are well below our prior guidance. With our major restructuring behind us and Noble Energy integration on track, we're prepared to execute this program with discipline."

Lowers Investment Outlook for 2022-2025

The company also lowered its longer-term guidance to $14 to $16 billion annually through 2025 (down 27% at the midpoint from its prior estimate of $19-22 billion).

During this time period, as capital is expected to decrease for a major expansion in Kazakhstan.

The company plans to increase investments in a number of assets, including the Permian, other unconventional basins, and the Gulf of Mexico.

Wirth added: "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."