Chevron Corp. (NYSE: CVX), the second largest U.S.-based oil producer, is budgeting $18.3 billion for capital projects next year, the company said Dec. 6, about 4% less than this year and lower for the fourth year in a row.
International energy company capital budgets, closely watched for indications of future oil and gas production, broadly have been shrinking after 2014's oil-price collapse slashed earnings and left many with high debt loads.
In Chevron's case, the sharp declines coincide with its spending winding down on several long-term and costly projects in Australia and elsewhere. Capital and exploratory spending in the first nine months of this year was about half that of three years ago, a company spokeswoman said.
The 2018 budget reflects "project completions, improved efficiencies and investment high-grading," said CEO John Watson in a statement. Spending on shale will rise to $4.3 billion overall, said Watson, who will retire early next year.
The San Ramon, Calif.-based company expects expenditures this year to be less than $19 billion, down from the $19.8 billion it estimated a year ago. It has told investors that capital spending between 2018 and 2020 would range from $17 billion to $22 billion a year.
Next year, Chevron expects to spend $15.8 billion on oil and gas exploration, $2.2 billion on refining, marketing and petrochemicals, and about $300 million for its share of affiliated company spending.
Most oil producers have yet to disclose their 2018 budgets, which generally are released in December and January. Analysts expect companies to pledge to keep 2018 spending in check and focus on reducing debt and boosting cash flow.
Chevron shares were off 78 cents at $119.61 in trading on Dec. 6 and are up less than 2% this year.
Recommended Reading
US Oil Stockpiles Surge as Prices Dip, Production Remains Elevated
2024-02-14 - EIA reported crude oil stocks increased by 12.8 MMbbl as February began, far outstripping expectations.
Woodside’s Pluto Train 2 Nears 2026 Start Up with Modules Delivery
2024-02-21 - First 3 of 51 modules have arrived on site in Western Australia for the onshore LNG project that will receive gas from the offshore Scarborough project.
CERAWeek: Tecpetrol CEO Touts Argentina Conventional, Unconventional Potential
2024-03-28 - Tecpetrol CEO Ricardo Markous touted Argentina’s conventional and unconventional potential saying the country’s oil production would nearly double by 2030 while LNG exports would likely evolve over three phases.
Oil Dips as Demand Outlook Remains Uncertain
2024-02-20 - Oil prices fell on Feb. 20 with an uncertain outlook for global demand knocking value off crude futures contracts.
US Leads Global Oil Production for Sixth Straight Year-EIA
2024-03-11 - The Energy Information Administration says it is unlikely that the record will be broken by another country in the near term.