Chevron Corporation's (NYSE:CVX) (San Ramon, California) 2018 capital and exploratory program of $18.3 billion is down for the fourth consecutive year, but includes a strong focus on its Permian Basin assets, according to the company.

Capital spending for 2017 is expected to be less than $19 billion, the company has said. Capital spending in 2016 was $22.4 billion. Industrial Info is tracking active Chevron projects worth nearly $90 billion, including more than $15 billion in the U.S. For related information, see October 30, 2017, article - Chevron Production Up, Capex Down as Major Projects Near Completion.

Chief Executive Officer John Watson said in a press release on Wednesday the drop in the capital budget reflects "project completions, improved efficiencies and investment high-grading. We're fully funding our advantaged Permian Basin position and dedicating approximately three-quarters of our spend to projects that are expected to realize cash flow within two years."

He continued, "With production currently exceeding guidance in the Permian, our 2018 plan should deliver both strong production growth and solid free cash flow, at prices comparable to what we've seen this year."

The 2018 budget includes $6.6 billion for U.S. upstream activity, and $9.2 billion in international upstream activity. Chevron said it will spend about $8.7 billion to sustain currently producing assets, including $3.3 billion for the Permian and $1.0 billion for other shale and tight rock investments.

About $5.5 billion of next year's upstream program is planned for major capital projects underway, including $3.7 billion associated with the Future Growth Project at the Tengiz field in Kazakhstan. Industrial Info is tracking more than $44 billion in Chevron project activity tied to the Tengiz field. For more information on the Tengiz Crude Oil and Natural Gas Processing 3GP Plant, see Industrial Info's project report.

Chevron said it expects global exploration funding to be about $1.1 billion. The remaining upstream spending will be earmarked for early stage projects.

The capital budget also covers $2.2 billion in downstream activity ($1.4 billion in the U.S. and $800 million internationally), covering downstream businesses that refine, market and transport fuels, and manufacture and distribute lubricants, additives and petrochemicals. Among other things, Chevron owns half of U.S. petrochemicals producer Chevron Phillips (The Woodlands, Texas), along with co-owner Phillips 66 (NYSE:PSX) (Houston, Texas). Industrial Info is tracking more than $15 billion in Chevron refining, chemical processing and terminals projects in the U.S. For related information, see November 13, 2017, article - Chevron Phillips Chemical Celebrates Startup of Texas Polyethylene Units

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