- Triples planned total capital investment to $10 billion through 2028
- Sets growth targets for renewable fuels, hydrogen, and carbon capture through 2030
- Reaffirms guidance of $25 billion excess cash generation over next five years
SAN RAMON, Calif.–(BUSINESS WIRE)–Sep. 14, 2021– During its Energy Transition Spotlight, Chevron Corporation (NYSE: CVX) announced plans to invest more capital to grow lower carbon energy businesses.
“Chevron intends to be a leader in advancing a lower carbon future,” said Michael Wirth, Chevron’s chairman and CEO. “Our planned actions target sectors of the economy that are harder to abate and leverage our capabilities, assets, and customer relationships.”
Establishes Growth Targets for Lower Carbon Businesses
Building on its strengths, the company set the following 2030 growth targets for new energy businesses:
- Grow renewable natural gas production to 40,000 MMBtu per day to supply a network of stations serving heavy duty transport customers;
- Increase renewable fuels production capacity to 100,000 barrels per day to meet growing customer demand for renewable diesel and sustainable aviation fuel;
- Grow hydrogen production to 150,000 tonnes per year to supply industrial, power and heavy duty transport customers; and
- Increase carbon capture and offsets to 25 million tonnes per year by developing regional hubs in partnership with others.
To achieve this scale, the company expects to invest more than $10 billion between now and 2028, including $2 billion to lower the carbon intensity of Chevron’s operations. This is more than triple the company’s previous guidance of $3 billion.
“Renewable fuels, hydrogen and carbon capture target customers such as airlines, transport companies and industrial producers,” said Jeff Gustavson, president of Chevron New Energies. “These sectors of the economy are not easily electrified, and customers are seeking lower carbon fuels and other solutions to reduce carbon emissions.”
Reaffirms Guidance for High Return Traditional Business While Targeting Faster Growing Lower Carbon Businesses
At a Brent oil price average of $60 per barrel, the company reaffirmed its expectation to earn double-digit return on capital employed by 2025 and generate $25 billion of cash flow, above its dividend and capital spending, over the next five years. The company also reaffirmed its 2028 upstream production greenhouse gas intensity targets, which equate to an expected 35% reduction from 2016 levels.
“With the anticipated strong cash generation of our base business, we expect to grow our dividend, buy back shares and invest in lower carbon businesses,” Wirth concluded. “We believe a strategy that combines a high return, lower carbon traditional business with faster growing, profitable new energy ones positions us to deliver long-term value to our shareholders.”