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Researched by Industrial Info Resources (Sugar Land, Texas)--Chevron Corporation (NYSE:CVX) (San Ramon, California) is planning $15 billion in capital spending (capex) for 2022, an increase of more than 20% from its likely 2021 total. This includes about $800 million worth of carbon-reduction efforts. Like Exxon Mobil Corporation (NYSE:XOM) (Irving, Texas) and other top oil and gas players, Chevron has been enjoying a post-COVID-lockdown jump in profits from higher oil and gas prices, but is heeding investor concerns about overspending and climate change. Industrial Info is tracking more than $53.8 billion worth of active Chevron projects globally, including nearly $14.5 billion worth in North America.
Click on the image at right for a graph detailing Chevron's active projects worldwide, by project type.
In its upstream business, Chevron is allocating about $8 billion to its currently producing assets, including about $3 billion for Permian Basin unconventional development and about $1.5 billion for other shale assets worldwide. In the deepwater Gulf of Mexico, Chevron is preparing to begin work on its Anchor Field development in the first quarter of 2022. The multi-phase project includes a $1.5 billion platform about 140 miles off the coast of Louisiana, a $500 million drilling program comprising seven wells and about $500 million in subsea infrastructure. The Anchor development is expected to produce about 75,000 barrels per day (BBL/d) of crude oil and natural gas. "The Gulf of Mexico has high return, low-carbon assets--some of the lowest-carbon intensity barrels in our portfolio--and is a business that we've been invested in for decades," said Pierre Breber, the chief financial officer of Chevron, in a recent quarterly earnings-related conference call. "So it's sort of a modestly growing part of the portfolio." Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Production Project Database can read detailed project reports for the platform, drilling program and subsea infrastructure.
About $2.3 billion of Chevron's planned 2022 capex is slated for its downstream businesses, including petroleum refining and the production of lubricants and additives, as well as renewable fuels and products. These projects include the proposed conversion of a refinery in Pasadena, Texas, into a hydroskimming facility to process light-tight oil, and coker drum replacements at a refinery in Pascagoula, Mississippi, to extend the facility's life. Subscribers can learn more from Industrial Info's reports on the Texas and Mississippi projects.
Chevron also is partnering with Microsoft Corporation (NASDAQ:MSFT) (Redmond, Washington), oilfield service provider Schlumberger (NYSE:SLB) (Houston, Texas) and Clean Energy Systems (Rancho Cordova, California) to build a carbon capture and storage (CCS) facility in Mendota, California. Chevron and its partners expect the plant to convert agricultural biomass to electricity, while capturing and extracting 300,000 metric tons per year of CO2. A final investment decision on the project is expected next year. Subscribers can learn more from Industrial Info's project report.
Not included as part of Chevron's planned $15 billion in 2022 capex is an estimated $600 million investment in two soybean-crushing facilities owned by U.S. agricultural commodities trader Bunge Limited (NYSE:BG) (Chesterfield, Missouri). Chevron and Bunge say the investment will result in a 50:50 joint venture that will supply Chevron with feedstock for renewable fuels. Chevron will support Bunge's efforts to double capacity at soybean oilseed-processing plants in Cairo, Illinois, and Destrehan, Louisiana, which currently process 5.3 million and 6.2 million bushels per year, respectively. Subscribers can learn more from Industrial Info's reports on the Illinois and Louisiana projects.
"Given Chevron has extensive hydroprocessing capacity, we see the possibility to produce renewable diesel or even sustainable aviation fuel in the future," Chevron downstream executive vice president Mark Nelson told Reuters in September. He said the amount of renewable diesel Chevron ultimately produces "will be driven by market conditions," but expects the company eventually will process renewable feedstocks at its U.S. West Coast and Gulf Coast refineries.
While its $15 billion capex plans for 2022 are significantly higher than those for the current year, Chevron's outlook still is lower than the $20 billion it had planned for 2020, before the impact of COVID-19 forced it to slash its investment plans. It also is on the lower side of Chevron's $15 billion-to-$17 billion per year guidance range for 2022, announced earlier this year.
Michael Wirth, the chief executive officer of Chevron, said in a press release the budget "reflects Chevron's enduring commitment to capital discipline"--no doubt encouraged by shareholders wary of heavy capex plans amid ongoing uncertainty about the COVID-19 Omicron variant and the effects of climate change.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
Click on the image at right for a graph detailing Chevron's active projects worldwide, by project type.In its upstream business, Chevron is allocating about $8 billion to its currently producing assets, including about $3 billion for Permian Basin unconventional development and about $1.5 billion for other shale assets worldwide. In the deepwater Gulf of Mexico, Chevron is preparing to begin work on its Anchor Field development in the first quarter of 2022. The multi-phase project includes a $1.5 billion platform about 140 miles off the coast of Louisiana, a $500 million drilling program comprising seven wells and about $500 million in subsea infrastructure. The Anchor development is expected to produce about 75,000 barrels per day (BBL/d) of crude oil and natural gas. "The Gulf of Mexico has high return, low-carbon assets--some of the lowest-carbon intensity barrels in our portfolio--and is a business that we've been invested in for decades," said Pierre Breber, the chief financial officer of Chevron, in a recent quarterly earnings-related conference call. "So it's sort of a modestly growing part of the portfolio." Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Production Project Database can read detailed project reports for the platform, drilling program and subsea infrastructure.
About $2.3 billion of Chevron's planned 2022 capex is slated for its downstream businesses, including petroleum refining and the production of lubricants and additives, as well as renewable fuels and products. These projects include the proposed conversion of a refinery in Pasadena, Texas, into a hydroskimming facility to process light-tight oil, and coker drum replacements at a refinery in Pascagoula, Mississippi, to extend the facility's life. Subscribers can learn more from Industrial Info's reports on the Texas and Mississippi projects.
Chevron also is partnering with Microsoft Corporation (NASDAQ:MSFT) (Redmond, Washington), oilfield service provider Schlumberger (NYSE:SLB) (Houston, Texas) and Clean Energy Systems (Rancho Cordova, California) to build a carbon capture and storage (CCS) facility in Mendota, California. Chevron and its partners expect the plant to convert agricultural biomass to electricity, while capturing and extracting 300,000 metric tons per year of CO2. A final investment decision on the project is expected next year. Subscribers can learn more from Industrial Info's project report.
Not included as part of Chevron's planned $15 billion in 2022 capex is an estimated $600 million investment in two soybean-crushing facilities owned by U.S. agricultural commodities trader Bunge Limited (NYSE:BG) (Chesterfield, Missouri). Chevron and Bunge say the investment will result in a 50:50 joint venture that will supply Chevron with feedstock for renewable fuels. Chevron will support Bunge's efforts to double capacity at soybean oilseed-processing plants in Cairo, Illinois, and Destrehan, Louisiana, which currently process 5.3 million and 6.2 million bushels per year, respectively. Subscribers can learn more from Industrial Info's reports on the Illinois and Louisiana projects.
"Given Chevron has extensive hydroprocessing capacity, we see the possibility to produce renewable diesel or even sustainable aviation fuel in the future," Chevron downstream executive vice president Mark Nelson told Reuters in September. He said the amount of renewable diesel Chevron ultimately produces "will be driven by market conditions," but expects the company eventually will process renewable feedstocks at its U.S. West Coast and Gulf Coast refineries.
While its $15 billion capex plans for 2022 are significantly higher than those for the current year, Chevron's outlook still is lower than the $20 billion it had planned for 2020, before the impact of COVID-19 forced it to slash its investment plans. It also is on the lower side of Chevron's $15 billion-to-$17 billion per year guidance range for 2022, announced earlier this year.
Michael Wirth, the chief executive officer of Chevron, said in a press release the budget "reflects Chevron's enduring commitment to capital discipline"--no doubt encouraged by shareholders wary of heavy capex plans amid ongoing uncertainty about the COVID-19 Omicron variant and the effects of climate change.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
