Chevron has outlined its capital expenditure (capex) budget for 2025, indicating a $2bn year-over-year reduction.
The company's consolidated subsidiaries are set to receive an organic capex budget of between $14.5bn and $15.5bn, with an additional $1.7bn–2bn earmarked for affiliate capex.
Chevron chairman and CEO Mike Wirth said: "The 2025 capital budget along with our announced structural cost reductions demonstrate our commitment to cost and capital discipline.
"We continue to invest in high-return, lower-carbon projects that position the company to deliver free cash flow growth."
The upstream spending, of approximately $13bn, will be invested in the US, with around two-thirds designated for developing Chevron’s domestic portfolio.
The Permian Basin, a key area for Chevron, will see a reduced budget of $4.5bn–5bn as the company shifts its focus from production growth to enhancing free cash flow.
Investments in the US will also be channelled into the DJ Basin and the Gulf of Mexico.
These regions are expected to contribute to an offshore production target of 300,000boepd by 2026, the energy giant said.
Internationally, Chevron plans to allocate around $1bn to Australian projects including the Gorgon backfill investments.
The downstream capex is projected at roughly $1.2bn, with the majority being spent within the US.
Approximately $1.5bn of the upstream and downstream budgets has been allocated to reduce carbon intensity and expand new energy businesses, with corporate and other capex estimated at $700m.
Chevron's affiliate Tengizchevroil will receive less than half of the affiliate capex, as the future growth project is on track to produce first oil in the first half of 2025.
The rest of the affiliate spend will mainly support Chevron Phillips Chemical Company ventures such as the Golden Triangle Polymers and Ras Laffan Petrochemical Projects.
In its fourth-quarter (Q4) interim update, Chevron announced plans to achieve $2bn–3bn in structural cost reductions by the end of 2026.
As part of this effort, the company anticipates a restructuring charge of $700m–900m after-tax in Q4, with associated cash outflows expected over the next two years.
Additionally, Chevron is preparing for estimated non-cash, after-tax charges of between $400m and $600m due to impairments, asset sales and other obligations.
