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Chevron plans to boost 2024 capital spending to $18.5-19.5 billion

Chevron plans to boost 2024 capital spending to $18.5-19.5 billion © Reuters.

SAN RAMON, California – Chevron Corp. (NYSE:), one of the leading US oil explorers based in San Ramon, has announced its intention to increase its capital investment for the year 2024 to a range of $18.5 billion to $19.5 billion. This move is aimed at extending the longevity of crude production and reflects a strategic approach similar to that of its competitor Exxon Mobil Corp (NYSE:).

The company’s increased budget allocation includes a significant investment of $5 billion in the Permian Basin, which is a key area for shale and tight resource development. Despite Chevron’s robust financial performance during the pandemic relative to other oil majors, its stock has seen a notable decrease of approximately 20%, which is double the decline experienced by Exxon, amid ongoing investor concerns.

Chevron’s commitment to sustainability is evident in its plans to allocate nearly $2 billion towards reducing operational carbon intensity and supporting renewable energy projects. This includes the early 2024 start-up of the WPMP field conversion as part of the Tengizchevroil FGP/WPMP initiative in Kazakhstan.

In addition to these strategic investments, Chevron is also navigating through acquisitions that could further impact its annual budget. The company’s CEO, Mike Wirth, has indicated that the pending mid-next year closure of the Hess Corp (NYSE:). merger—subject to regulatory approvals—could expand Chevron’s annual budget range to $19-$22 billion post-acquisition.

Wirth has emphasized maintaining capital efficiency across traditional energy production and low-carbon ventures as part of Chevron’s strategy for sustainable free cash flow growth. This disciplined approach aims to balance capital expenditure across established energy domains and emerging eco-friendly alternatives while enhancing shareholder value returns.

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