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Chevron announces $20 billion capital and exploratory budget for 2020

Chevron has announced a 2020 organic capital and exploratory spending program of $20 billion. The 2020 budget supports a portfolio of upstream and downstream investments, highlighted by Chevron’s Permian Basin position, the company’s major capital project at TCO in Kazakhstan, and a queue of deepwater opportunities in the Gulf of Mexico.

“We are positioning Chevron to win in any environment by ratably investing in the highest-return, lowest-risk projects in our portfolio,” Michael Wirth, Chevron Chairman and CEO, said. “This will be the third consecutive year with organic capital spending held flat at $20 billion, continuing our capital discipline through the cycle. Our emphasis on short-cycle investments is expected to deliver improved returns on capital and stronger free cash flow over the long term,” 

As a result of Chevron’s approach to capital allocation and a downward revision in its longer-term commodity price outlook, the company will reduce funding to various gas-related opportunities, including Appalachia shale, Kitimat LNG, and other international projects. Chevron is evaluating its strategic alternatives for these assets, including divestment. In addition, the revised oil price outlook resulted in an impairment at Big Foot. Combined, these actions are estimated to result in non-cash, after tax impairment charges of $10-11 billion in its Q4 2019 results, more than half related to the Appalachia shale.

“We believe the best use of our capital is investing in our most advantaged assets,” Mr Wirth added. “With capital discipline and a conservative outlook comes the responsibility to make the tough choices necessary to deliver higher cash returns to our shareholders over the long term.”

Details of the 2020 Capital and Exploratory Spending Program include:

Chevron 2020 Planned Capital & Exploratory Expenditures


$ Billions

US Upstream


International Upstream


Total Upstream



US Downstream


International Downstream


Total Downstream





TOTAL (Including Chevron’s Share of Expenditures by Affiliated Companies)



Expenditures by Affiliated Companies


Cash Expenditures by Chevron Consolidated Companies




In the upstream business, approximately $11 billion is forecasted to sustain and grow currently producing assets, including about $4 billion for Permian unconventional development and about $1 billion for other international unconventional development. Approximately $5 billion of the upstream program is planned for major capital projects underway, of which about 75% is associated with the Future Growth Project and Wellhead Pressure Management Project (FGP/WPMP) at the Tengiz field in Kazakhstan. Global exploration funding is expected to be about $1 billion.

Approximately $2.8 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.

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