(Reuters) -Oil major Chevron Corp (NYSE:CVX) said on Wednesday that it expects to spend between $18.5 billion and $19.5 billion next year on new oil and gas projects, an 11% increased compared to this year.
Its 2024 budget and that of Exxon Mobil (NYSE:XOM) reflect the industry’s continuing rebound after pandemic-influenced pullbacks last decade, recent acquisitions and carbon reduction initiatives. Exxon outlined its plan to spend between $22 billion and $27 billion annually through 2027.
While both are spending more, the combined sums are less than half the combined $84 billion Exxon and Chevron spent in 2013, when oil prices often traded above $100 per barrel. The two are benefiting from higher energy prices and pandemic cost-cuts.
Chevron’s figure excludes any impact from its proposed acquisition of rival Hess Corp (NYSE:HES). That deal, which is expected to close next year, will push capital expenditures to between $19 billion and $22 billion, it said.
Chevron in October agreed to buy Hess for $53 billion in stock to gain a bigger U.S. oil footprint and a stake in rival Exxon Mobil’s massive Guyana offshore oil discoveries.
Wednesday’s disclosures did not include a new forecast for oil production next year. Chevron previously said the two deals would bring total oil and gas output to about 3.7 million barrels per day.
Chevron plans to spend about $9 billion of its current budget in the U.S., as oil companies move investments to the Americas to reduce costs and pare geopolitical risks.
Of the total projected budget, about $5 billion will be devoted to its fast-growing Permian shale production operation, and another $1.5 billion to other shale and tight oil businesses. The shale and tight oil spending increases reflect its acquisition of PDC Energy (NASDAQ:PDCE) earlier this year.
Projects in the Gulf of Mexico will take up about $3.5 billion, with production from a new oil platform, Anchor, expected to start next year.About 80% of its expenditures next year on refining and chemicals will also be in the U.S., it said.
The company intends to increase share repurchases by $2.5 billion to the top end of its guidance range of $20 billion per year once the Hess deal closes.
Nearly half of a $3 billion budget for its affiliates are planned for the company’s Tengizchevroil project in Kazakhstan, it said.
Source: Economy - investing.com
