The U.S. supermajors, ExxonMobil and Chevron, continue with their plans to make the most of their priority oil and gas assets and projects and grow cash flows despite the changing geopolitical scene.
Last month, both companies announced their 2025 and medium-term capital expenditure plans, which include prioritizing production and development of their so-called advantaged assets.
The biggest U.S. shale basin, the Permian, is a priority for both, but so are assets outside the United States, such as oil projects in Guyana and Kazakhstan and LNG developments in America and abroad.
Chevron, for example, has just started up oil production at an expansion project at the largest oilfield in Kazakhstan that will boost crude oil output by 260,000 barrels per day (bpd).
Chevron, which owns 50% in affiliate Tengizchevroil LLP (TCO), the company operating the giant Tengiz development, achieved first oil at the Future Growth Project (FGP) in the field. The project expands sour gas injection capability and is expected to ramp up total field output to 1 million barrels of oil equivalent per day (boepd), the U.S. supermajor said last week.
“First oil at the Future Growth Project is the latest in a series of development milestones, including in the Gulf of Mexico and the Permian, that are expected to significantly increase free cash flow to the company and deliver value for Chevron shareholders,” Mark Nelson, Chevron vice chairman, said.
While the Kazakhstan development is set to boost Chevron’s crude oil production and cash flow, it could further complicate Kazakhstan’s efforts to compensate for overproduction as part of its commitment to the OPEC+ alliance.
Kazakhstan, a non-OPEC producer, is part of the OPEC+ group and has been struggling, alongside Russia and Iraq, to fall in line with its assigned output quota as part of the OPEC+ agreements.
The boost in oil production at Kazakhstan’s top oilfield comes as U.S. President Donald Trump calls on OPEC to reduce oil prices.
“I’m also going to ask Saudi Arabia and OPEC to bring down the cost of oil,” President Trump said in an address to the World Economic Forum last week.
The President’s ‘drill, baby, drill’ call for a surge in American oil and gas production has not found enthusiastic support from U.S. producers, including the biggest oil firms, Exxon and Chevron.
In announcing their capex plans for 2025 and beyond, both supermajors stressed they would seek efficiencies, including in capital allocation.
Chevron said that in 2025, “Permian Basin spend is lower than the 2024 budget and anticipated to be between $4.5 and $5.0 billion as production growth is reduced in favor of free cash flow.”
Exxon will prioritize “competitively advantaged, high-return, low-cost-of-supply investments,” which are the Permian, Guyana, and LNG.
In 2025, the company expects cash capital expenditures in the range of $27 to $29 billion, reflecting the first full year of Pioneer in the portfolio and investment to build new businesses, with base capex remaining flat.
Exxon has four LNG projects under development and expects to top 40 million metric tons per annum of LNG sales by 2030 to expand its global LNG footprint and market access. The company expects to achieve first LNG sales from the Golden Pass development in the United States and from the Qatar North Field East expansion project near the end of 2025. It also is targeting final investment decisions at Papua New Guinea’s Papua project in 2025 and at Mozambique’s Rovuma development in 2026.
Yet, Exxon warned that significant new LNG supply will not be coming to the market until 2026-2027, when many of the new U.S. and Qatari export projects are expected to come on stream.
“The problem is you don’t find gas from one day to the next,” Philippe Ducom, President of ExxonMobil Europe, told Bloomberg last week.
The U.S. President, who lifted on day one the Biden pause on new LNG permits, has called on Europe to buy more American LNG if it wants to avoid tariffs.
By Tsvetana Paraskova for Oilprice.com