Page 14 - NorthAmOil Week 49

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Chevron anticipates
boosting spending on
regions including the
Permian Basin in the
medium term.

Chevron follows ExxonMobil in capex cut

GLOBAL CHEVRON followed rival super-major Exxon- undertake things where we think our unique set
Mobil in announcing a cut to its capital expend- of technical, operating and financial capabilities
iture budget last week. This comes as both large allow us to do things that are large, complex,
and small producers are looking to 2021 – and at scale and things that aren’t necessarily easily
beyond – and independents can be expected to done by others.”
follow the super-majors’ leads in announcing Chevron’s energy transition goals are thus
scaled-back spending plans over the coming linked to reducing methane leaks and emissions
weeks. intensity from its oil and gas production. But this
Chevron said on December 3 – three days leaves the company able to increase its overall
after ExxonMobil’s capex plans were unveiled emissions as its output grows.
– that its 2021 capital and exploratory spending “We favour action over pledges,” Wirth said.
programme would total $14bn. It added that its “Long-dated pledges where we really don’t know
longer-term capex guidance over 2022-25 was how we’ll get to the end of the road are something
$14-16bn. This is down from a previous pro- that we’ve been a little bit careful about.” The
jection of $19-22bn, which excluded the assets comments appear to relate to European rivals
Chevron had acquired through its takeover of setting long-term targets of net-zero emissions.
Noble Energy earlier this year. Chevron unveiled In 2021, Chevron anticipates spending
2020 capex guidance of $20bn this time last around 17% of its upstream capital in the Per-
year before subsequently scaling back its plans mian Basin, 56% across international assets and
after the oil and gas industry entered its latest the remaining 26% on other US assets. Chevron will
downturn. Looking ahead to 2022-25, Chevron expects
“Chevron remains committed to capital dis- capital spending on an expansion of its Tengiz not be following
cipline with a 2021 capital budget and longer- project in Kazakhstan to decrease, freeing up
term capital outlook that are well below our prior funds to ramp up investments in assets closer to European super-
guidance,” stated Chevron’s chairman and CEO, home. The company said it anticipated increas-
Michael Wirth. “With our major restructuring ing investment in various “advantaged assets” majors in pivoting
behind us and Noble Energy integration on over this period, including the Permian Basin, away from oil and
track, we’re prepared to execute this programme other unconventional plays and the Gulf of
with discipline.” Mexico. gas and towards
The super-major said it would continue to “As that project [Tengiz] completes, we’ve
prioritise investments that are “expected to grow got additional capital spending then that will renewables.
long-term value and deliver higher returns and move into other unconventional opportunities
lower carbon”. It added that this would include in Argentina, in the US and in Canada, and in the
over $300mn worth of investments aimed at deepwater Gulf of Mexico,” Wirth said.
advancing the energy transition in 2021. How- Some parallels can be drawn between
ever, Chevron will not be following European Chevron and ExxonMobil here, with the lat-
super-majors in pivoting away from oil and gas ter also saying it would prioritise spending
and towards renewables. on a handful of assets including its operations
“We’ve not chosen to do things such as wind in the Permian. But Chevron appears to have
and solar where there are strong, well-estab- more a focus on its entire US portfolio, which
lished players,” Wirth told Bloomberg TV. “We now includes the assets it acquired through its
don’t really have an advantage. We intend to merger with Noble.™

P14 www. NEWSBASE .com Week 49 10•December•2020