Chevron Plans Cuts to Capital Budget
March 24 2020 - 6:34AM
Dow Jones News
By Christopher M. Matthews
Chevron Corp. is cutting $4 billion from its capital budget as
it confronts plummeting petroleum demand and an oil-price rout, the
latest major energy company to axe its spending to shore up its
balance sheet.
The oil giant said Tuesday it would reduce its 2020 spending by
20% to about $16 billion, with the biggest cut to come in the
largest U.S. oil field, the Permian Basin in West Texas and New
Mexico. Chevron will also suspend stock buybacks but promised to
protect its dividend and said oil production would be flat.
Chief Executive Mike Wirth said the dual shock of the oil
demand-sapping coronavirus pandemic and an increase in supply due
to the oil-price war between Saudi Arabia and Russia necessitated
drastic measures.
"To see these two things happen simultaneously is really
unprecedented," Mr. Wirth said in an interview. "We can't control
that, but we're focused on making the moves that will preserve the
strength of our company."
Chevron's announcement follows similar austerity measures by its
peers and other large industrial companies.
On Monday, Royal Dutch Shell PLC halted its $25 billion share
buyback program and cut its capital expenditures by 20% in 2020 to
$20 billion from $25 billion. Total SA said Monday it planned to
trim spending by $3 billion, halt $2 billion in buybacks and borrow
$4 billion to make up for a $9 billion shortfall created by low oil
prices. ExxonMobil Corp. said last week it planned to make
significant cuts to its spending.
(END) Dow Jones Newswires
March 24, 2020 07:19 ET (11:19 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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