Chevron Earmarks $2B for Permian in 2021

Chevron Corp. (NYSE: CVX) on Thursday announced a $14 billion capital and exploratory budget for 2021

The company also revealed that it has lowered its longer-term annual capital guidance for 2022 through 2025 to a range of $14 billion to $16 billion. Previously, guidance for the period ranged from $19 billion to $22 billion and excluded Chevron’s integration of Noble Energy, the firm noted in a written statement emailed to Rigzone.

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

According to Chevron, the capital guidance assumes greater investments in the Permian Basin, other unconventional basins and the Gulf of Mexico and decreased spending for a major expansion in Kazakhstan. Additionally, the company stated its capital outlook will continue to emphasize growing long-term value, delivering higher returns and lowering carbon.

Below is a breakdown of Chevron’s capital and exploratory budget for next year.

SOURCE: Chevron

Chevron stated that roughly $2 billion, or 31 percent, of the $6.5 billion it plans to spend on upstream producing assets will go toward Permian unconventional development. It anticipates another $3.5 billion from the upstream capex program for major capital projects underway – with about 75 percent of that total for the Future Growth Project and Wellhead Pressure Management Project (FGP/WPMP) at the Tengiz field in Kazakhstan. The company added that it will allocate the remaining $1.5 billion for upstream to exploration, early stage development projects and midstream activities.

“Chevron is in a different place than others in our industry,” remarked Wirth. “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.”

To contact the author, email mveazey@rigzone.com.