Exxon, Chevron to spend billions more on oil projects next year

Exxon, Chevron to spend billions more on oil projects next year

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Exxon said it would increase project investment to $23 billion to $25 billion next year from an estimated $22 billion this year. Chevron said it plans to spend about $15 billion to $17 billion this year. The increase includes new money for emissions reduction projects and the effects of inflation.

More spending will not immediately lead to more production. Exxon has said it expects production next year to top about 3.7 million barrels of oil equivalent per day (boed), while Chevron forecasts more than 3% compound annual growth through 2026.

Exxon Chief Executive Darren Woods said Thursday that Exxon will miss its target of pumping 1 million baud from its Permian operations by about two years. It now aims to reach between 900,000-1 million boed in 2027.

The biggest change will be the amount of cash earned. Exxon sees the potential for $100 billion in excess cash by 2027, assuming global oil prices of $60 a barrel. Chevron should generate about $34 billion in free cash flow next year, more than double its oil investment levels, according to Jefferies Equity Research.

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