Chevron increases project spending budget by 11% for 2024
Reuters
Published Dec 06, 2023 06:04PM ET
Updated Dec 06, 2023 09:01PM ET
By Sabrina Valle
(Reuters) -Oil major Chevron Corp (NYSE:CVX) 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 (NYSE:XOM) 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 (NYSE:HES). 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 (NASDAQ:PDCE) earlier this year.
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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.
Written By: Reuters
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