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For the first time in four years, Chevron will spend more in 2019 than in the current year, with total spending at US$20 billion, the company said in a statement. This compares with US$18.3 billion for this year.
The strong position of the company in the Permian was one driver of this decision, but some of its international operations also supported the hike.
“Our 2019 budget supports a robust portfolio of upstream and downstream investments, highlighted by our world-class Permian Basin position, additional shale and tight development in other basins and our major capital project at TCO in Kazakhstan,” Chevron’s chief executive and chairman Michael K. Wirth, said.
“Our investments are anchored in high-return short-cycle projects, with more than two-thirds of spend projected to realize cash flow within two years,” he added.
The total upstream budget for 2019 will stand at US$17.3 billion, of which US$9.7 billion would go into international projects and the remainder will be invested in domestic operations. Also, of the total US$17.3 billion in upstream investments, the bigger portion, or US$10.4 billion, will be spent on maintaining and expanding existing production, and the rest will be poured into new wells.
To compare, this year Chevron had earmarked US$15.8 billion for upstream investments, of which US$6.6 billion in the United States and US$9.2 billion to be spent internationally.
The focus at home will next year continue to be, hardly surprisingly, on shale. Chevron has earmarked US$3.6 billion for expanding its production in the Permian and another US$1.6 billion will be invested in other shale plays in the United States. That makes a total of US$5.2 billion for U.S. shale, which is substantially higher than this year’s budget of US$4.3 billion.
In downstream, investments in 2019 will also be higher than this year, at US$2.5 billion versus US$2.2 billion a year earlier, Chevron said.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.