Chevron to Cut Spending in Permian by Up to 10% by 2025

Chevron Corp. announced that it will reduce capital expenditures in the Permian Basin, adopting a more cautious approach to production increases in the largest oil field in the United States. The company plans to allocate a budget of between $4.5 billion and $5 billion for the region in 2025, indicating a decrease of up to 10%. This decision represents Chevron's first budget cut since 2021.

In a recent statement emphasizing a strategic shift, Chevron said, "Production growth is being reduced in favor of free cash flow." This move shows a prioritization of financial returns over increasing production levels.

The Permian Basin, covering West Texas and New Mexico, has significantly contributed to global oil supply, surpassing Iraq's production and becoming a key player in the market. Originally driven by independent drilling companies, major oil firms like Chevron have since begun to tap into the region's rich resources.

Despite the planned expenditure reduction, Chevron aims to increase its production in the Permian next year. However, the growth rate will be much slower compared to the annual increase of 15% sustained since 2021. As it approaches its goal of producing one million barrels per day, Chevron is forced to adopt a more measured approach to expansion.