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Chevron to boost spending to $20 billion in 2019

07/12/2018
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US energy giant Chevron is to raise its spending budget for the first since 2014, assigning $20 billion for activities and investments throughout 2019.
Chevron's increased spending plans come amid falling oil prices.
The first of the supermajors to announce their spending plans for 2019, particular areas for focus highlighted by Chevron include boosting its foothold in the Permian Basin to drive its shale business forward, as well as further investments in its Tengiz megaproject in Kazakhstan. 

Across Chevron’s upstream business, approximately $10.4 billion is forecasted to sustain and grow currently producing assets, including $3.6 billion for the Permian and $1.6 billion for other shale and tight investments. Approximately $5.1 billion of the upstream program is planned for major capital projects underway, including $4.3 billion associated with the Future Growth Project at the Tengiz field in Kazakhstan. Global exploration funding is expected to be about $1.3 billion. Remaining upstream spend will be for early stage projects supporting potential future developments.

Around $2.5 billion of Chevron’s planned capital spending is associated with the company’s downstream businesses that refine, market, and transport fuels, and manufacture and distribute lubricants, additives and petrochemicals.

Details of the 2019 Capital and Exploratory Spending Program have been outlined as follows:
Details of Chevron's 2019 spending plans
(Table via Chevron).

Commenting on the spending plans, Chevron’s Chairman and CEO Michael K. Wirth said:

“Our 2019 budget supports a robust portfolio of upstream and downstream investments, highlighted by our world-class Permian Basin position, additional shale and tight development in other basins and our major capital project at TCO in Kazakhstan. Our investments are anchored in high-return short-cycle projects, with more than two-thirds of spend projected to realize cash flow within two years”.

“We expect to continue to deliver steady production growth, enabling continued free cash flow that underpins our strong dividend and share repurchase program”.

With Chevron announcing bullish spending plans it’s clear that 2019 is being viewed as a year of growth by major players within the industry. This is despite falling oil prices, which indicates that companies are confident of being able to operate efficiently in a low-price environment. The spread of spending, with a strong focus on the Permian, also highlights the rise of unconventional oil sources within the upstream sector.

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Tags: Oil & Gas
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Chevron to boost spending to $20 billion in 2019 - Time to read 3 min
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