Chevron Corp. said it would cut its annual capital spending budget by 26% next year and sharply through the middle of the decade, as the coronavirus pandemic forces an industrywide reappraisal of fossil-fuel investment.
Chevron said it would spend $14 billion in 2021 and between $14 billion and $16 billion a year through 2025. It previously said it would spend $19 billion to $22 billion a year through 2024 before the pandemic, while returning as much as $80 billion to shareholders over that period.
In October, Chevron told investors it would spend around $14 billion in 2021 and indicated its long-term budget could be reduced as well.
The reductions by the U.S. oil giant follow those announced this week by rival Exxon Mobil Corp. , which on Monday said it was reducing its yearly capital spending by about $5 billion to $10 billion each year through 2025. Exxon, which has lost more than $2.3 billion over the first three quarters of this year, also said it would slash the book value of its assets by up to $20 billion.
Chevron has lost nearly $5 billion this year, but unlike Exxon has managed to avoid taking on large amounts of new debt due to a relatively strong balance sheet. The company’s share price is down about 5% over the last six months and closed at $89.87 Wednesday.
