Chevron preps for big 2027 exploration capex ramp
Chevron Corp., Houston, could increase its exploration capital budget by more than $500 million in 2027 as executives look to capitalize on strong commodity markets and build on an organizational shuffle that has centralized and accelerated decision-making.
Speaking after Chevron reported its third-quarter results, vice-chairman Mark Nelson told analysts that the company’s opportunities globally are “the largest and highest-quality I have seen in years.” Chevron has added more than 20 million acres to its portfolio since mid-2024 and deployed artificial-intelligence tools to more quickly assess promising development candidates.
In the third quarter, Nelson said, Chevron teams added six blocks in the Gulf of Mexico as well as sites in Angola, Nigeria, Guinea-Bissau, and Egypt. Going forward, he added, he expects Namibia, Equatorial Guinea, and Suriname to be among the regions Chevron adds to its list for exploration. That function was centralized as part of a broad corporate streamlining launched last year that also grouped the company’s offshore and shale assets into dedicated divisions and sought to save about $3 billion in costs. Nelson said the centralized group now uses “one global standard” to assess projects, which has sped up decisions and helped set the stage for next year’s ramp.
“Given the growth in the opportunity set and the new team and new approach we’ve brought forward and given from where we come, I would expect us to increase our capital spend next year 50% from our previous baseline,” Nelson said. “Over time, you would expect to see us maybe drilling around 20 wells a year […] We’ll continue to do that over time until we see a reason to adjust.”
Two workers on stairs at Shell's Whale oil and gas platform in the US Gulf of Mexico
ExxonMobil Unity FPSOAt end-2025, Chevron was drilling four exploration wells, two each in the United States and Asia. The company’s exploration capex last year totaled a little more than $1.2 billion, which was an increase from $1.0 billion in both 2024 and 2023.
Nelson made his comments after the Chevron team led by chairman and chief executive officer Mike Wirth said the company had booked third-quarter net profits of $10.0 billion on revenues of $67.8 billion. In the same period of last year, those numbers were $3.5 billion and $49.7 billion, respectively. The company’s upstream earnings climbed 73% year over year to $5.7 billion while downstream profit more than quadrupled to $4.9 billion.
Production from the company’s assets around the world averaged 3.98 million boe/d during the quarter, which was down slightly from the second quarter and the year-ago period in part because of the Iran war. Helping offset some of that drop was record production from the company’s operated assets in Australia as well as the Gulf. The company’s refineries set a throughput record of 1.09 million b/d and ran at 98% of their capacity.
Among the other topics discussed on the Chevron conference call were:
- Venezuela’s “very different set of dynamics” – Wirth elaborated on other recent commentary from Chevron leaders about its operations in the Latin American country, which grew two months ago when it was assigned rights to develop two areas in the Orinoco Belt. The situation today, Wirth said, differs from the past in that “we are lifting all the oil” rather than PDVSA, and Chevron also is marketing it, meaning the company controls the revenue that covers costs and taxes. In addition, Wirth said, Chevron is paying off debt issued in Venezuela a long time ago and funding its planned capex there through local revenues.
- Chances that Chevron pivots back to growth mode in the Permian – The prolific basin now produces about 1 million b/d for Chevron and that’s a level where Wirth and his team have said they’ll likely stay for a while. Asked if he might push that number higher (including via acquisition), Wirth said he didn’t want to speculate on that possibility but said his priority in the Permian is “sweating the assets” and elongating their productive lives via drilling technology, new chemicals, and more efficient spending.
Shares of Chevron (Ticker: CVX) were up 1.5% to about $235 in midday trading Oct. 30. Over the past 6 months, they have now risen more than 20%, which has grown the company’s market capitalization to more than $460 billion.
About the Author
Geert De LombaerdeGeert De Lombaerde
Senior Editor
A native of Belgium, Geert De Lombaerde has more than two decades of business journalism experience and writes about markets and economic trends for Endeavor Business Media publications Healthcare Innovation, IndustryWeek, FleetOwner, Oil & Gas Journal and T&D World. With a degree in journalism from the University of Missouri, he began his reporting career at the Business Courier in Cincinnati and later was managing editor and editor of the Nashville Business Journal. Most recently, he oversaw the online and print products of the Nashville Post and reported primarily on Middle Tennessee’s finance sector as well as many of its publicly traded companies.
