US oil supermajor Chevron will cut capital spending next year for the first time since the pandemic oil crash, dialling back its shale expansion plans just as Donald Trump enters office with a pledge to “drill, baby, drill”. America’s second-biggest oil producer on Thursday announced a capex budget of $14.5bn-$15.5bn for 2025, down from $15.5bn-$16.5bn this year.
It is the first time Chevron has lowered spending since 2021, when producers were reeling from a pandemic-induced collapse in energy demand, and comes as oil prices retreat on fears of oversupply in the global market.
The Opec cartel announced on Thursday it would continue to hold back supplies, in another sign of producer concern about the oil market’s health.
Chevron also said it would book up to $1.5bn in charges and impairments in the fourth quarter. “The 2025 capital budget along with our announced structural cost reductions demonstrate our commitment to cost and capital discipline,” said Mike Wirth, Chevron chief executive. “We continue to invest in high-return, lower-carbon projects that position the company to deliver free cash flow growth.”
Chevron’s tempered spending plans are a blow to Trump’s commitment to pursue US “energy dominance” and unleash the country’s oil sector to bring down prices at the pump for consumers and project American power abroad.
