Chevron Corporation sets ambitious $18.5-$19.5bn capex for 2024

Chevron Corporation (NYSE: CVX) has recently declared its anticipated organic capital expenditure range for 2024, spanning $15.5 to $16.5 billion for consolidated subsidiaries (capex) and an additional $3 billion for affiliate capital expenditure (affiliate capex). This comprehensive plan underscores Chevron’s commitment to expanding its energy operations across various sectors.

Major Focus on Upstream Spending and U.S. Shale Development

The lion’s share of Chevron’s 2024 budget, approximately $14 billion, is dedicated to upstream spending. Notably, two-thirds of this investment is allocated within the United States. A significant portion, around $6.5 billion, is earmarked for developing Chevron’s U.S. shale and tight portfolio, with $5 billion planned specifically for the Permian Basin. Additionally, about 25 percent of the U.S. upstream capex is directed towards projects in the Gulf of Mexico, including the notable Anchor project, expected to achieve first oil in 2024.

Chevron Announces Robust 2024 Capital Expenditure Plan

Strategic Investment in Downstream Operations and Renewable Energy

Downstream capex for Chevron in 2024 is projected at about $1.5 billion, with a substantial 80 percent allocated domestically. The company also plans to invest approximately $0.5 billion in corporate and other capex. Significantly, the upstream and downstream budgets include around $2 billion in lower carbon capex, aimed at reducing the carbon intensity of traditional operations and fostering growth in new energy business lines. A key project under this initiative is the Geismar renewable diesel expansion project, slated for start-up in 2024.

Affiliate Capex and International Investments

Nearly half of Chevron’s affiliate capex is planned for Tengizchevroil’s FGP / WPMP project in Kazakhstan. Approximately a third is allocated for Chevron Phillips Chemical Company, encompassing the Golden Triangle Polymer Project and Ras Laffan Petrochemical Project. The WPMP field conversion is forecasted to begin in the first half of 2024.

Chevron’s Capital Discipline and Acquisition Moves

Chevron Chairman and CEO Mike Wirth emphasized the company’s dedication to capital discipline in both traditional and new energy sectors. These investments are poised to support Chevron’s objective of robust free cash flow growth and enhanced shareholder returns. Furthermore, with the acquisition of PDC Energy and the proposed acquisition of Hess Corporation, Chevron has set an annual capex guidance range of $14 to $16 billion through 2027. Post-acquisition, Chevron’s annual capex budget is expected to range between $19 and $22 billion.