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The Leading American Oil Company Chevron Corporation Announced Its Organic Capital of US$ 15 Billion for Spending in 2022
The capital is at the lower end of the estimate, which was between US$ 15 and US$ 17 billion and is more than 20% above what was expected for 2021. The oil company also expects to increase its share buyback program. Last Monday, Chevron explained that this capital program aims to support the goal of higher returns and lower carbon, which includes approximately US$ 800 million less in carbon spending.
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Additionally, the program excludes the US$ 600 million expected for the formation of a joint venture with Bunge, a multinational in the agriculture and food sector, aimed at producing raw materials for renewable fuels.
It is worth noting that, in March 2021, Chevron reaffirmed its 2021-2025 guidance for organic capital and exploratory expenses of US$ 14 to US$ 16 billion.
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“We are sizing our capital program at a level consistent with plans to sustain and grow the company as the global economy continues to recover,” said Chevron’s President and CEO, Mike Wirth.
The oil company increased its share buyback guidance range from US$ 3 billion to US$ 5 billion per year, against the previous projection of US$ 2 billion to US$ 3 billion per year.
Meanwhile, ExxonMobil, Chevron’s competitor, has committed US$ 15 billion to emissions reduction plans by 2027, aiming to maintain financial investments of US$ 20 billion to US$ 25 billion per year during the same period.
Upstream Investments and Exploratory Spending
Chevron has a total planned capital for upstream and exploratory spending of approximately US$ 12.6 billion, with US$ 8 billion currently directed towards production assets. This includes about US$ 3 billion for unconventional development in the Permian Basin and approximately US$ 1.5 billion for other shale and tight assets worldwide.
Additionally, US$ 3 billion from the company’s upstream program is designated for ongoing capital projects. Of that amount, approximately US$ 2 billion is associated with the Future Growth Project and Wellhead Pressure Management Project (FGP / WPMP) in the Tengiz field in Kazakhstan.
Finally, the amount of US$ 1.5 billion is reserved for exploration, early-stage development projects, intermediate activities, and carbon reduction opportunities.
Approximately US$ 2.3 billion of planned organic capital spending is allocated to the downstream sector of the oil company, which refines, markets, and transports fuels, in addition to manufacturing and distributing lubricants, additives, and petrochemical products. This also includes capital to develop renewable products and fuels businesses.
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