Inspectioneering
News

Chevron Announces Billions in Spending Cuts

Reuters, December 4, 2020
Reuters

U.S. oil major Chevron Corp on Thursday cut billions off its long-term capital and exploratory budget even after a major restructuring of its operations as it tries to ride out a collapse in oil prices and preserve its dividend.

Oil majors have written off around $80 billion in asset values this year, cut output and laid off thousands of staff to save money in the face of a sharp decline in oil demand and revenue.

Chevron said it expects total capital and exploratory budget through 2025 to be between $14 billion and $16 billion, well below the prior forecast of up to $22 billion.

Its move to restrain spending on new oil projects, hold outlays flat next year and cut about $6 billion from last forecast was a sign it expects low energy prices for years.

The reduction came despite the addition of massive projects in the United States, Middle East and Africa, acquired by Chevron as part of a $4.1 billion purchase of Noble Energy.

Detailing its 2021 budget of $14 billion, the company said it will spend $11.5 billion on exploration and production and $2.1 billion for refining related operations.

Chevron’s 2021 Permian basin spending of $2 billion is half of what it planned at the start of 2020 and lower than 2019 levels of $3.6 billion, said Biraj Borkhataria from RBC Capital Markets, adding that the company has been true to its recent message of “lower for longer capex”.

Despite the cut to the overall budget, the company said starting 2022 it was likely to raise investments in the Permian basin and the Gulf of Mexico, helped by an anticipated drop in capital needed for a Kazakhstan project.

In contrast with Chevron, which has been praised for its capital discipline, its U.S. rival Exxon Mobil Corp on Monday said by 2025, it will boost expenditures above this year’s $23 billion level.

Chevron shares were up about 1% at $90.72 in early morning trade.


(Reporting by Shariq Khan and Jennifer Hiller; Editing by Patrick Graham and Arun Koyyur)

Click here to read the full article from Reuters.

Copyright 2021 Thomson Reuters. Click for restrictions.

Comments and Discussion

There are no comments yet.

Add a Comment

Please log in or register to participate in comments and discussions.


Inspectioneering Journal

Explore over 20 years of articles written by our team of subject matter experts.

Company Directory

Find relevant products, services, and technologies.

Talent Solutions

Discover job opportunities that match your skillset.

Case Studies

Learn from the experience of others in the industry.

Integripedia

Inspectioneering's index of mechanical integrity topics – built by you.

Industry News

Stay up-to-date with the latest inspection and asset integrity management news.

Blog

Read short articles and insights authored by industry experts.

Expert Interviews

Inspectioneering's archive of interviews with industry subject matter experts.

Event Calendar

Find upcoming conferences, training sessions, online events, and more.

Downloads

Downloadable eBooks, Asset Intelligence Reports, checklists, white papers, and more.

Videos

Watch educational and informative videos directly related to your profession.

Acronyms

Commonly used asset integrity management and inspection acronyms.