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Chevron Budgets 2019 Capex at Upper End of Guidance Range


Nov. 20 2020, Updated 11:14 a.m. ET

Chevron’s capex plan

Chevron (CVX) plans to spend $20 billion on capex in 2019, which is at the upper end of its guidance range of $18 billion–$20 billion for the coming years. Chevron’s budgeted capex for 2019 is expected to be higher than the company’s estimated 2018 capex. The expected rise in Chevron’s 2019 capex reflects its focus on steady upstream production growth fueled by its core projects.

In the first nine months of 2018, Chevron incurred capex of $14.3 billion, around 5% above its 2018 budgeted capex. In comparison, ExxonMobil (XOM) could also exceed its capex guidance of $24 billion in 2018. Royal Dutch Shell (RDS.A) and BP (BP) plan to spend $25 billion and $15 billion, respectively, in 2018.

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Chevron plans to spend 87% of its total budgeted capex on the upstream segment in 2019. Chevron is concentrating on projects that can provide better returns in less turnaround time. The company plans to spend a larger portion of the upstream capex on international projects like the Tengiz Field in Kazakhstan. On the domestic front, Chevron plans to spend around 26% of its capex in the Permian and other shale and tight resources development.

Permian and Wheatstone were the company’s volume growth drivers in the third quarter when Chevron saw record volumes. The company’s earnings and cash flows rose steeply in the third quarter. Plus, Chevron bought back stock in the quarter. After earnings, Wall Street analysts raised the company’s earnings forecast for the year. Analysts now expect Chevron’s earnings per share to rise by 125% in 2018, higher than peers.

Chevron plans to spend 13% of capex in 2019 on its downstream segment. The downstream segment is a critical part of Chevron’s integrated earnings model because the segment supports the company’s total earnings during periods of lower upstream earnings.


The rise in Chevron’s budgeted capex shows the company’s confidence in spending on competitive projects. Chevron now focuses only on projects that can yield returns at any point in an oil price cycle. Thus, Chevron plans to strengthen its upstream portfolio to drive volumes and earnings growth, build robust cash flows, and raise shareholder returns.


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