[Editor's note: This story was updated at 7:25 a.m. CST Dec. 7.]
Chevron Corp. (NYSE: CVX) plans to spend $20 billion next year on oil and natural gas projects, the second-largest U.S. oil producer said Dec. 6 in a statement, its first increase in four years.
Its 2019 capital spending budget is at the high end of an $18 billion to $20 billion-per-year range that Chevron executives set earlier this year as the annual target through 2020.
The company has said it expects to spend $19.8 billion this year.
San Ramon, Calif.-based Chevron and other energy companies have pledged to restrain spending after the oil-price collapse earlier this decade forced many to borrow to cover their costs of expensive and long-term projects.
"Operating cash flow is strong, so it should be able to cover spending along with the dividend,” said Brian Youngberg, an oil and gas analyst with investment firm Edward Jones.
Among the highlights of its budget, Chevron plans to spend more on shale production next year and more on investments in refining and chemicals, according to its spending projection.
The company plans to spend $3.6 billion in the Permian Basin of West Texas and New Mexico and $1.6 billion for other shale regions, or $5.2 billion in total, up from $4.3 billion on such investments this year.
Two-thirds of the 2019 budget will go toward projects that "realize cash flow within two years," CEO Michael Wirth said in a statement.
Chevron also said it would spend $4.3 billion on the giant Tengiz Field in Kazakhstan, up from the $3.7 billion budgeted this year.
About $2.5 billion of planned spending will go towards its business that refines, transports and markets fuels and petrochemicals, up $300 million from the amount it projected to spend this year.
Most oil producers have yet to disclose their 2019 budgets, which generally are released in December and January.
Chevron shares were off $1.33 on Dec. 6, to $115.91 per share and are down 7.4% year to date.
Recommended Reading
For Sale, Again: Oily Northern Midland’s HighPeak Energy
2024-03-08 - The E&P is looking to hitch a ride on heated, renewed Permian Basin M&A.
E&P Highlights: Feb. 26, 2024
2024-02-26 - Here’s a roundup of the latest E&P headlines, including interest in some projects changing hands and new contract awards.
Gibson, SOGDC to Develop Oil, Gas Facilities at Industrial Park in Malaysia
2024-02-14 - Sabah Oil & Gas Development Corp. says its collaboration with Gibson Shipbrokers will unlock energy availability for domestic and international markets.
E&P Highlights: Feb. 16, 2024
2024-02-19 - From the mobile offshore production unit arriving at the Nong Yao Field offshore Thailand to approval for the Castorone vessel to resume operations, below is a compilation of the latest headlines in the E&P space.
TotalEnergies Acquires Eagle Ford Interest, Ups Texas NatGas Production
2024-04-08 - TotalEnergies’ 20% interest in the Eagle Ford’s Dorado Field will increase its natural gas production in Texas by 50 MMcf/d in 2024.