More than Half of Chevron's Capex Set for U.S.

Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)

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Summary

Chevron pegged its 2026 spending at the low-end of the long-term guidance. The United States appears to be the central focus.

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Low-End Spending for Next Year

U.S.-based supermajor Chevron Corporation (Houston, Texas) said that about $10.5 billion, more than half of its planned budget for next year, would target operations in the domestic market.

"Our 2026 capital program focuses on the highest-return opportunities while maintaining discipline and improving efficiency, enabling us to grow cash flow and earnings," said Mike Wirth, the chief executive officer of Chevron, in an announcement detailing the company's 2026 capital-spending (capex) budget. "We're positioned to deliver superior shareholder returns while advancing investments that strengthen long-term value."

The company reported Wednesday, after U.S. markets closed, that it planned to spend between $18 billion and $19 billion for 2026. That's at the low end of its long-term guidance range of between $18 billion and $21 billion.

It's been a tough year for Chevron after leaving its campus in San Ramon, California for Houston. The company reported net income during the third quarter of $3.54 billion, 21% below the same period last year. The loss was attributed to $235 million in transaction costs tied to the acquisition of Hess Corporation (New York City, New York) and lower crude oil prices.

West Texas Intermediate (WTI), the U.S. benchmark for the price of crude oil, averaged $65.74 per barrel during the third quarter, compared to $79.42 per barrel during the same period last year. Already this year, Chevron cut 20% of its staff and relocated thousands of others to India, where labor costs are lower.

By the Numbers

• 20% of Chevron's staff targeted for layoffs
• $10.5 billion in U.S. spending for 2026
• $6 billion in U.S. shale plays alone

U.S.-Focused Capex for 2026

Despite the pain, the company remains committed largely to its U.S. operations. More than half of its total spending next year, about $10.5 billion, will focus on U.S. operations. Some $6 billion of that would go toward operations in shale basins such as the Permian, Denver-Julesberg and the Bakken.

Of those, the Permian is the most prolific. The top inland shale oil producer in the U.S., the Permian is expected to yield 6.55 million barrels per day (BBL/d), accounting for about half of the total national output. It's the second-largest gas producer, after the Appalachia Basin, with an expected 2025 average of 27.7 billion cubic feet per day (Bcf/d), representing nearly 25% of the U.S. total.

Globally, Chevron said it would designate about 40% of its capital expenditures in 2026 on offshore developments in the Eastern Mediterranean, the U.S. territorial waters of the Gulf of Mexico and Guyana.

In the Americas, the Gulf of Mexico is the only source of meaningful growth in crude oil production. Federal estimates point to a 3% increase in offshore production to 1.97 million BBL/d, while Lower 48 production declines by 1% to average 11.13 million BBL/d.

Chevron kicked off 2025 with the start of oil production at its semi-submersible Whale Platform in the deep waters off the coast of Texas. The company believes production will average 100,000 barrels of oil equivalent per day with 15 wells initiated during the first phase of development.

Chevron holds a 40% working interest in the Whale facility, alongside majority-owner Shell plc (London, England).

Subscribers to Industrial Info's Global Market Intelligence (GMI) Power Project and Plant databases can learn more about the Whale development--including capacities, investment values and necessary equipment--in a detailed plant report.

Elsewhere, Guyana is emerging as the latest energy powerhouse with its offshore reserves. Success for Chevron could come from the construction of the Uara and Whiptail projects offshore Guyana, with both expected to be brought online before the end of the decade.

Before merging with Chevron, Hess reported $3.1 billion in earnings from its Guyana holdings last year, up from $1.9 billion in 2023.

Downstream, Chevron said spending would be only at about $1 billion next year, with the bulk of that going to U.S. operations.

Key Takeaways

• More than half of Chevron's spending plans target U.S.
• It's been a rough year for the U.S. supermajor.
• Guyana is another source of focus.

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About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).