Chevron increases share buyback to $5B PA 

Chevron Corp. has boosted its planned share buyback to as much as $5 billion per year, as the firm uses higher commodities prices to step up returns to investors rather than investing in production growth.

The repurchases are now seen at $3 billion to $5 billion a year, about 60 per cent higher than previous guidance, the company said Wednesday in a statement.

Capital spending next year will be $15 billion, the low end of a previous forecast and 25 per cent below pre-pandemic levels.

The California-based oil giant generated the most free cash flow in its 142-year history during a third quarter in which oil and gas prices surged.

But the company is wary of plowing that cash back into new production at a time when crude prices have sharply pulled back and the emergence of the omicron variant raises concerns about global oil-demand recovery.

The budget reflects “Chevron’s enduring commitment to capital discipline,” Chief Executive Officer Mike Wirth said in the statement.

It’s “at a level consistent with plans to sustain and grow the company as the global economy continues to recover.”

Despite the tight purse strings, Chevron will spend $3 billion this year in the Permian, the world’s largest shale basin in West Texas and New Mexico.

That’s a 50 per cent increase from last year’s budget and a sign of the basin’s growing importance within Chevron’s overall portfolio.  About $2 billion goes to the giant Tengiz project in Kazakhstan.

Some $800 million, or 5 per cent of the total budget, will be spent on low carbon investments.