US energy giant and LNG producer Chevron has increased its 2023 capital spending budget by more than 25 percent from this year to $17 billion.
Chevron announced budgets of $14 billion for consolidated subsidiaries (capex) and $3 billion for equity affiliates (affiliate capex), which total near the high end of the company’s guidance range.
These budgets support Chevron’s objective to safely deliver higher returns and lower carbon and include about $2 billion in lower carbon capex, more than double the 2022 budget, the firm said.
Chevron said its 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.
“We’re maintaining capital discipline while investing to grow both traditional and new energy supplies,” Chevron chairman and CEO Mike Wirth said in the statement.
“Our capex budgets remain in line with prior guidance despite inflation,” Wirth said.
Upstream capex includes more than $4 billion for Permian Basin development and roughly $2 billion for other shale & tight assets.
More than 20 percent of upstream capex is for projects in the Gulf of Mexico while the international upstream capex is $3.5 billion.
Lower carbon capex across all segments totals around $2 billion, including $0.5 billion to lower the carbon intensity of Chevron’s traditional operations and about $1 billion to increase renewable fuels production capacity, the firm said.
Chevron produced a record number of LNG cargoes in the third quarter of this year, mostly from its Gorgon and Wheatstone plants in Western Australia.
The company’s international upstream operations earned $5.91 billion in third quarter, compared with $3.17 billion a year ago.