Chevron’s Moves Are Giving Us Major 2020 Flashbacks (Spoiler: It’s Not Good)

When a company’s moves start getting compared to COVID, you know it’s not a setup for a feel-good story (unless someone’s bringing back the sourdough craze or another binge-worthy Tiger King moment). Chevron, though? They’re blowing the dirt off their 2020 “How to Survive Chaos” playbook… but instead of flattening curves, they’re flattening budgets.

Chevron just announced a budget trim for 2025, their first big cost-cut since oil prices took a dump in 2021. The revised spending target? $14.5 billion to $15.5 billion (down from this year’s $15.5 billion to $16.5 billion).

And the Permian Basin, the superstar of U.S. shale, is taking a hit. Chevron’s earmarking $4.5 billion to $5 billion for the region, dialing back growth plans by 10%. It’s like telling your star player to sit out the fourth quarter (not because they’re not good, but because you’re saving energy for the next game).

Offshore, Chevron isn't letting up… they’re keeping their foot firmly on the gas (pun absolutely intended). The Gulf of Mexico is still a top priority, with the deepwater Anchor platform preparing to hit full production. It’s a classic case of doubling down: when you’re in a hole, sometimes the best move is to dig even deeper (this time, literally).

What’s the big picture? Chevron’s moves scream “caution” in a market where oil prices are hovering around $68.30 per barrel, down 5.6% this year. Gone are the days of aggressive expansion… Today's playbook is all about keeping investors happy. Turns out, shareholders care more about fat dividends and buybacks than new oil rigs (who would’ve thought?).

Chevron CEO Mike Wirth is wrapping this up in corporate buzzwords like “capital discipline.” All that means is they’re prioritizing cash flow over chasing production records. And it’s way more than just pleasing Wall Street… Chevron’s also juggling the $53 billion Hess acquisition to beef up reserves without breaking the bank.

(Source: Barron’s)

Don’t forget the $1.5 billion restructuring tab Chevron’s also footing. Sure, the Permian might hit 1 million barrels a day next year, but after that? Flat as Kansas. Instead, Chevron’s pivoting to crowd-pleasers like share buybacks and those glorious dividend checks. This move also hands OPEC a perfectly wrapped christmas gift, letting them control supply without worrying about a flood of U.S. oil undercutting their pricing games. 

And then there’s Trump, probably warming up for his next energy pep rally with a remixed “Drill, Baby, Drill.” Chevron, however, is all, “Nah, we’ll drill… if the spreadsheet gives us a thumbs-up.”

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