Chevron Corporation, the California-based energy giant, announced this Thursday it will invest $300M to advance energy transition. The announcement was made within the capital destinated to exploratory budget for 2021.
The company announced a $14 billion capital budget for such activities, and also a lowered longer-term guidance of $14 to $16 billion, from its prior $19 to $22 billion, through 2025; this original spending plan excluded expenses associated with the Noble Energy acquisition.
“This capital outlook will continue to prioritize investments that are expected to grow long-term value; deliver higher returns and lower carbon for the company,” Chevron’s report reads.
Chevron’s CEO and chairman, Michael Wirth, said in a statement: “Chevron remains committed to capital discipline with a 2021 capital budget and longer-term capital outlook that are well below our prior guidance; with our major restructuring behind us and Noble Energy integration on track, we’re prepared to execute this program with discipline.”
As many other major oil and gas company in the world, Chevron has to significantly reduce its expenses in early 2020, due to the demand destruction the pandemic brought to the market. In the first month of 2020, the company started with a $20 billion capital budget.
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The future for Chevron
In this regard, Wirth explained his company has: “maintained consistent financial priorities starting with our firm commitment to the dividend. We took early and swift action at the beginning of the pandemic to prudently allocate capital, reduce costs and protect our industry leading balance sheet.”
The $14 billion budget would be divided like this; $6,5 billion for the upstream business, allocated to currently producing assets, including $2 billion for unconventional developments. Another $3,5 billion for future upstream projects, which 75% of them are associated with its Tengiz field at Kazakhstan.
The last $1,5 billion would be allocated to exploration and early-stage developments and for midstream activities.
As we’ve reported previously, Chevron also has natural gas assets in the middle east in mind, as Noble Energy has a significant participation in the Mediterranean Sea, off Israel’s costs. Such part of its portfolio may expand in years to come.