Chevron to cut capital spending in coming years by 25%, including in Colorado

SAN RAMON, California —  Chevron Corp. (NYSE: CVX) will cut its new drilling and operations budget over the next four years by a quarter, which likely reduces the amount of new activity it’ll do in Colorado after acquiring Noble Energy this year.

The San Ramon, California-based oil giant said Thursday it would cut its capital and exploratory budget to $14 billion to $16 billion in years 2021 to 2025. Its capital budget was $19 billion to $22 billion per year in years before the Noble acquisition.

Chevron’s new budget calls for $5 billion annually in new oil production efforts in the U.S., but doesn’t define how much of that would be split between Colorado and the company’s drilling efforts in California, Texas, the Gulf of Mexico and in the Appalachian region.

The cuts are likely in response to estimates of stagnant or declining demand for fuel in the coming decades. BP Plc. (NYSE: BP) estimated in September that oil consumption will likely decline through 2050, either by about 10% through that date if world governments take no action on fuel usage to as much as 65% through that date if governments push to reach net-zero carbon emissions.

In October, Chevron acquired Noble Energy, then Weld County’s second-largest oil producer, for $13 billion when counting both its assets and debt.

All of Noble Energy’s operations in Colorado are based in Weld County.

Reuters later reported up to 25% of Noble’s workforce of 700 would be cut as it was assimilated into Chevron, but the company would not confirm how many jobs would be cut in Colorado.

In a statement, Chevron said it would not release specific regional spending details for the $5 billion in annual budgets it has for its U.S. upstream operations, save for saying that it would invest $2 billion per year Texas’ Permian Basin.

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