Chevron Corporation (NYSE:CVX, ETR:CHV) has reduced its capital expenditures (capex) and affiliate capex budgets by $2 billion year-over-year in 2025 to improve free cash flow, the energy giant announced on Friday.
It expects organic capex for its consolidated subsidiaries in the range of $14.5 billion to $15.5 billion and affiliate capex in the range of $1.7 billion to $2 billion.
This year’s capex budget was in the range of $15.5 billion to $16.5 billion.
It anticipates upstream spending of $13 billion in 2025, of which two-thirds will be used to develop its US portfolio.
Spending in the Permian Basin will be less than in 2024, expected to be in the range of $4.5 billion and $5 billion. The company noted that production growth is being reduced here in favor of free cash flow.
Downstream capex is set to be approximately $1.2 billion, with two-thirds to be spent on the US.
Further, the company said it expects to incur charges between $1 billion and $1.5 billion during the fourth quarter, mostly related to restructuring charges.
"The 2025 capital budget along with our announced structural cost reductions demonstrate our commitment to cost and capital discipline," Chevron CEO Mike Wirth commented.
"We continue to invest in high-return, lower-carbon projects that position the company to deliver free cash flow growth."
Chevron shares traded modestly lower before Friday’s opening bell, down 0.5% at about $159.