Yemisi Izuora
US oil major Chevron Corporation, has announced a capital and exploratory spending program of $18.3 billion for the next calendar year 2018.
The company said in a statement, the capex program includes $5.5 billion spending corresponding to its share of expenditure by affiliated companies. Of the $18.3 billion, the company plans to spend $15.8 billion in its upstream operations and $2.2 billion in downstream operations.
“Our 2018 budget is down for the fourth consecutive year, reflecting project completions, improved efficiencies, and investment high-grading. We are fully funding our advantaged Permian Basin position and dedicating approximately three-quarters of our spend to projects that are expected to realize cash flowwithin two years,” Chevron Chief Executive (CEO) John Watson said.
He added that with production currently exceeding guidance in the Permian basin, Chevron’s 2018 plan should deliver both strong production growth and solid free cash flow, at prices comparable to what we’ve seen this year.”
In the upstream business, the company has projected $8.7 billion spending to sustain currently producing assets, including $3.3 billion for the Permian and $1.0 billion for other shale and tight rock investments. Also, $5.5 billion of the upstream program is planned for major ongoing capital projects including $3.7 billion associated with the Future Growth Project at the Tengiz field in Kazakhstan.
Global exploration funding is expected to be about $1.1 billion while the remaining upstream spend will be for early stage projects supporting potential future developments. Around $2.2 billion of planned capital spending is associated with the company’s downstream businesses that refine, market and transport fuels, and manufacture and distribute lubricants, additives and petrochemicals.