(Energy Analytics Institute, 5.Dec.2024) — Chevron Corporation eyes organic capital expenditure (Capex) of between $14.5bn-$15.5bn for its consolidated subsidiaries in 2025. In terms of affiliate Capex, the company eyes between $1.7bn-$2bn in 2025.
The California-based company’s 2025 Capex and affiliate Capex represent a $2bn year-over-year reduction, the company announced 5 Dec. 2024 in an official statement.
“The 2025 capital budget along with our announced structural cost reductions demonstrate our commitment to cost and capital discipline,” Chevron chairman and CEO Mike Wirth said in the statement. “We continue to invest in high-return, lower-carbon projects that position the company to deliver free cash flow growth.”
Upstream Capex of $13bn, lower Permian spend
Upstream spending is expected to be about $13bn, and roughly two-thirds will destined to develop Chevron’s US portfolio.
The spend in the Permian Basin in 2025 will be lower compared to 2024 and anticipated to be between $4.5bn-$5bn as production growth is reduced in favor of free cash flow.
The remaining spend in the US will be split between the DJ Basin and the Gulf of Mexico (GOM), Chevron said. The company expects a continued ramp up in deepwater growth projects, which are expected to deliver offshore production of 300,000 boe/d in 2026.
Internationally, Chevron will destine $1bn Australia, which will include Gorgon backfill investments.
In the downstream space, Chevron eyes Capex of $1.2bn, two-thirds of which will be destined to the US. Within Chevron’s total upstream and downstream budgets, about $1.5bn of Capex is destined to lowering the carbon intensity of the company’s operations and growing New Energies businesses. Corporate and other Capex is expected to be around $0.7bn, the company said.
Affiliate Capex and Tengizchevroil LL
Chevron said that the budget for Tengizchevroil LLP represents less than 50% of affiliate Capex as “the Future Growth Project is projected to achieve first oil in the first half of 2025,” the company said in the statement.
The remaining affiliate spend primarily supports Chevron Phillips Chemical Company LLC, which includes the Golden Triangle Polymers and Ras Laffan Petrochemical Projects.
4Q24 interim update, restrucuturing charge
Chevron, in connection with recently announced plans to achieve $2bn-$3bn in structural cost reductions by year-end 2026, looks recognize a restructuring charge of $0.7bn-$0.9bn after-tax in the fourth-quarter 2024 (4Q:24), with associated cash outflows over the next 2 years.
Chevron looks to recognize non-cash, after-tax charges related to impairments, asset sales, and other obligations of between $0.4bn-$0.6bn in the 4Q:24. Chevron will treat these as special items and exclude them from adjusted earnings, it said in the statement.
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