Chevron plans 25% increase in organic capital spend in 2023

Chevron Corp. plans to increase its organic capital expenditure in 2023 by 25% from 2022, while slightly decreasing its affiliate spend.

The company is budgeting $14 billion capex next year, excluding acquisitions, and $3 billion for equity affiliates.

“We’re maintaining capital discipline while investing to grow both traditional and new energy supplies,” said Chevron chairman and chief executive officer Mike Wirth.

Chevron’s 2023 organic capex includes $11.5 billion in upstream spending ($8 billion US, $3.5 billion international) and $1.9 billion in downstream capex ($1.5 billion US, $300 million international) and affiliate capex budgets of $1.9 billion upstream and $1.1 billion downstream.

Upstream capex includes more than $4 billion for Permian basin development and roughly $2 billion for other shale and tight assets. More than 20% of upstream capex is for projects in the Gulf of Mexico.

Nearly half of affiliate capex is for Tengizchevroil’s Future Growth Project-Wellhead Pressure Management Project (FGP-WPMP) in Kazakhstan and about a third is for Chevron Phillips Chemical Co., including the US Gulf Coast II petrochemical project.

The budgets include about $2 billion in lower carbon capex, more than double the 2022 budget, including $500 million to lower the carbon intensity of Chevron’s traditional operations and about $1 billion to increase renewable fuels production capacity, the company said in a release Dec. 7.

Chevron’s 2023 capex budget assumes cost inflation that averages in the mid-single digits with certain areas higher, such as the Permian basin that assumes low double-digit cost inflation.