Chevron increases project spending budget by 11% for 2024 - Reuters
Chevron increases project spending budget by 11% for 2024 | Reuters
Chevron increases project spending budget by 11% for 2024
File photo: The logo of American multinational energy corporation Chevron is displayed at their booth during the LNG 2023 energy trade show in Vancouver, British Columbia, Canada, July 12, 2023. REUTERS/Chris Helgren/File photo Acquire Licensing Rights
Dec 6 (Reuters) - Oil major Chevron Corp (CVX.N) said on Wednesday that it expects to spend between $18.5 billion and $19.5 billion next year on new oil and gas projects, an 11% increase on this year.
Its 2024 budget and that of rival Exxon Mobil (XOM.N) reflect the industry's continuing rebound after pandemic-influenced pullbacks, recent acquisitions and carbon reduction initiatives. Exxon plans to spend between $22 billion and $27 billion annually through 2027.
While both are spending more, the combined sums are about half the combined $84 billion Exxon and Chevron spent in 2013, when oil prices often traded above $100 per barrel. The two are benefiting from higher energy prices and pandemic cost-cuts.
Chevron's planned spending includes between $15.5 billion to $16.5 billion in organic capital expenditure for consolidated subsidiaries, and another $3 billion for affiliates.
About half of the affiliate spending is for Tengizchevroil's project in Kazakhstan, Chevron said.
Chevron's figure excludes any impact from its proposed acquisition of rival Hess Corp (HES.N). That deal, which is expected to close next year, will push capital spending to between $19 billion and $22 billion, it said.
The oil producer in October agreed to buy Hess for $53 billion in stock to gain a bigger U.S. oil footprint and a stake in Exxon Mobil's massive Guyana offshore oil discoveries.
Wednesday's disclosures did not include a new forecast for oil production next year. Chevron previously said the two deals would bring total oil and gas output to about 3.7 million barrels per day.
Chevron plans to spend about $9 billion of its current budget in the U.S., as oil companies move investments to the Americas to reduce costs and pare geopolitical risks.
About $5 billion will go to its fast-growing Permian shale production operation. The shale and tight oil spending increases reflect its acquisition of PDC Energy earlier this year.
Projects in the Gulf of Mexico will take up more than $2 billion, with production from a new oil platform, Anchor, expected to start next year. And roughly 80% of the $1.5 billion for refining and chemicals will also be allocated in the U.S., it said.
The company intends to increase share repurchases by $2.5 billion to the top end of its guidance range of $20 billion per year once the Hess deal closes.
Reporting by Arunima Kumar in Bengaluru and Sabrina Vale in Houston; Editing by Shailesh Kuber and Sonali Paul
Our Standards: The Thomson Reuters Trust Principles.
Related Knowledge Center: Climate economics
Climate change is now a driver of the world’s economy. The impact is profound:
- Catastrophic weather events — hurricanes, floods, droughts, high temperatures — are more frequent and more extreme. The cost can be measured in both the initial damage caused and the longer-term impact on the economy.
- Vulnerable communities are increasing climate-related investments, hardening infrastructure and taking other protective measures.
- Investment in carbon capture and storage technologies is increasingly rapidly.
- Governments are making investments and crafting regulations to reduce emissions of carbon dioxide and other greenhouse gases.
On top of all of this is the cost of uncertainty. As the Fourth National Climate Assessment, released in 2018 by the U.S. Global Change Research Program, says, “The assumption that current and future climate conditions will resemble the recent past is no longer valid.”