Tuesday, February 4, 2025
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Chevron Corporation (Chevron) recently outlined its plans for 2025 with a focus on capital discipline and lower-carbon initiatives. Here’s a breakdown of the key announcements:

Total Capex for 2025 is set at $17 billion, representing a $2 billion reduction compared to 2024.

This reduction reflects Chevron’s commitment to controlling costs and optimizing capital allocation.

The budget prioritizes investments in high-return, lower-carbon projects that are expected to generate strong free cash flow.

Upstream Spending: Approximately $13 billion will be directed towards upstream activities, with two-thirds allocated to develop Chevron’s U.S. portfolio.

  • Permian Basin expenditure will be between $4.5 billion and $5.0 billion, prioritizing free cash flow generation over aggressive production growth.
  • The remaining U.S. investment is split between the DJ Basin and the Gulf of Mexico, where deepwater projects are anticipated to deliver 300,000 barrels of oil equivalent per day (boe/d) by 2026.
  • Internationally, around $1.0 billion is earmarked for projects in Australia, including investments in the Gorgon gas field.

Downstream Spending: Approximately $1.2 billion is budgeted for downstream activities, with two-thirds allocated to the U.S.

Low-Carbon and New Energies: Roughly $1.5 billion of the total capex is dedicated to reducing the carbon intensity of Chevron’s operations and developing new energy businesses.

Corporate and Other Capex: Around $0.7 billion is budgeted for corporate and other expenses.

The budget for Tengizchevroil LLP, a major Chevron-affiliated project, is significantly reduced as the Future Growth Project nears completion with expected first oil production in the first half of 2025.

The remaining affiliate spending primarily supports Chevron Phillips Chemical Company LLC, including ongoing developments at the Golden Triangle Polymers and Ras Laffan Petrochemical projects.

In connection with its goal of achieving $2 to $3 billion in structural cost reductions by the end of 2026, Chevron anticipates recording restructuring charges of $0.7 to $0.9 billion after-tax in the fourth quarter, with associated cash outflows spread over the next two years.

The company also expects to recognize non-cash, after-tax charges related to impairments, asset sales, and other obligations of $0.4 to $0.6 billion in the fourth quarter. These are classified as special items and will be excluded from adjusted earnings.

Chevron emphasizes its commitment to providing affordable, reliable, and increasingly cleaner energy.

The company aims to achieve this goal by:

  • Growing its core oil and gas business.
  • Lowering the carbon intensity of its operations.
  • Investing in lower-carbon businesses such as renewable fuels, carbon capture and offsets, hydrogen, and other emerging technologies.

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