Chevron Boosts Annual Capex in 2019

Chevron Corporation has announced a $20bn capital expenditure programme for 2019, up from $18.3bn announced a year ago for 2018 – its first increase in forward capex in five years.

"Our 2019 budget supports a robust portfolio of upstream and downstream investments, highlighted by our world-class Permian Basin position, additional shale and tight development in other basins and our major capital project at TCO [Tengizchevroil] in Kazakhstan," said CEO Michael K. Wirth late December 6, adding that more than two-thirds of its spend is projected to realise cashflow within two years.

Chevron’s planned 2019 capex breaks down as follows: upstream $17.3bn (US $7.6bn and international $9.7bn), downstream $2.5bn and other $0.2bn. Almost one-third of the total ($6.3bn) would be by affiliated companies.

Chevron said that some $10.4bn of the total would be to sustain and grow currently producing assets, including $3.6 billion for the Permian and $1.6 billion for other shale and tight investments. In addition, $5.1bn is planned for major capital projects underway upstream, including $4.3bn associated with the Future Growth Project at the mainly oil Tengiz field in Kazakhstan. Tengizchevroil is 50% owned by Chevron, 25% by ExxonMobil, 20% by state KazMunayGas, and 5% by a BP/Lukoil joint venture.

Global exploration funding is expected to be about $1.3bn. Remaining upstream spending will be for early stage projects that may become developments.