More than 70% of Chevron's US$19.8 billion 2017 planned upstream investment will generate production within two years, the firm said yesterday.
Chevron says it is targeting shorter-cycle, high-return investments with its 2017 capital budget, which is 42% lower than its 2015 spending, and expected to be 15% lower then 2016 projected capital spending. It will mark a fourth consecutive year of spending reductions at the oil major.
The 2017 cash ($4.7 billion of which is spending by affiliated companies) will mostly be in Chevron's upstream business, with $17.3 billion spending split between its US business ($5.7 billion) and international ($11.6 billion).
In the upstream spending, $8.5 billion will be on base-producing assets, including Permian Basin developments. Another $7 billion will be toward completing the Gorgon and Wheatstone LNG projects in Australia and $3 billion of affiliate spending associated with the Future Growth Project-Wellhead Pressure Management Project (FGP-WPMP) project at the Tengiz field in Kazakhstan.
“Our spending for 2017 targets shorter-cycle time, high-return investments and completing major projects under construction. In fact, over 70% of our planned upstream investment program is expected to generate production within two years,” said Chevron chairman and CEO John Watson. “This is the fourth consecutive year of spending reductions. Construction is nearing completion on several major capital projects, which are now online or expected to come online in the next few quarters. This combination of lower spending and growth in production revenues supports our overall objective of becoming cash balanced in 2017.”
Image: Chevron's Wheatstone.