Chevron trims 2020 spending plan by $4 billion

San Ramon, March 24 - Neftegaz.RU.Chevron has made a decision to reduce its 2020 capital spending plan by $4 billion thereby joining many of its peers in drastic measures to mitigate the negative effects of the coronavirus pandemic and the recent plunge in oil prices.

Apache, Murphy Oil, ExxonMobil, ConocoPhillips, Noble Energy, Shell, Aker BP, Husky Energy, Total, and Lundin are only some of the operators that have decided to slash their budgets for 2020 as a response to the challenging market situation.

Chevron said it is making several steps as a response to current market conditions. “With an industry leading balance sheet and a flexible capital program, we believe Chevron is resilient and positioned to withstand this challenging environment,” said Chevron CEO, Michael Wirth.

“Given the decline in commodity prices, we are taking actions expected to preserve cash, support our balance sheet strength, lower short-term production, and preserve long-term value”, he noted.

The company is reducing its guidance for 2020 organic capital and exploratory spending by 20% to $16 billion. Reductions are expected to occur across the portfolio and it is estimated there will be a reduction of $2 billion in upstream unconventionals, primarily in the Permian Basin; a reduction of $700 million in upstream projects and exploration; a reduction of $500 million in upstream base business spread broadly across our U.S. and international assets; and, a reduction of $800 million in downstream & chemicals and other.

According to Chevron, cash capital and exploratory expenditures are expected to decrease by $3.3 billion to $10.5 billion in 2020.

Total capital and exploratory spending in the 2nd half of 2020 is expected to be about $7 billion, an annual run rate 30% lower than the approved budget announced in December 2019.