Major energy companies in Houston are reporting plans to invest billions of dollars in production expansions and new projects next year.
Irving, Texas-based Exxon Mobil Corp. (NYSE: XOM), which is moving its corporate headquarters to the company’s campus north of Houston next year, plans to invest between $23 billion and $25 billion in 2023 in high-return projects “to help increase supply and meet global demand,” the oil and gas giant laid out in a corporate plan published Dec. 8.
Exxon said it forecasts capital expenditures between $20 billion and $25 billion each year through 2027, prioritizing assets in its Upstream and Product Solutions segments. Over 70% of its upstream capital investments will be deployed in projects in the Permian Basin, Guyana and Brazil as well as liquefied natural gas developments around the globe. By 2027, Exxon expects upstream production to grow by 500,000 oil-equivalent barrels per day to 4.2 million boepd, with over half of its total production coming from those regions.
The company also plans to invest around $17 billion in low-carbon and emissions-reduction projects over the next five years, prioritizing projects in large-scale carbon capture and storage, biofuels and hydrogen.
“We will continue to advocate for clear and consistent government policies that accelerate progress to a lower-emissions future,” said Darren Woods, chairman and CEO of Exxon Mobil. “At the same time, we’ll continue to work to provide solutions that can help customers in other industries reduce their greenhouse gas emissions, especially in higher-emitting sectors of the economy like manufacturing, transportation and power generation.”
Exxon is also expanding its $30 billion share repurchase program up to $50 billion through 2024; The firm is on track to spend $15 billion on share buybacks this year.
California-based Chevron Corp. (NYSE: CVX), which also has a major presence in Houston, plans to invest $14 billion in organic capital spending next year, as well as another $3 billion for its equity affiliates.
Chevron plans to deploy $8 billion in its U.S. upstream business and an additional $3.5 billion in international upstream operations in 2023, the company reported Dec. 7. Over 20% of the firm’s upstream capex is budgeted for projects in the Gulf of Mexico, $4 billion is earmarked for Permian development, and another $2 billion is set aside for other shale and unconventional projects.
Chevron is spending around $2 billion on low-carbon investments next year, including $1 billion to boost renewable fuels production and $500 million to lower the carbon intensity of its existing operations.
Of its $3 billion in capex for affiliates next year, half is for the Future Growth Project and Wellhead Pressure Management Project at the Tengiz field in Kazakhstan. About a third is budgeted for The Woodlands-based Chevron Phillips Chemical Co., a joint venture between Chevron and Houston-based Phillips 66 (NYSE: PSX), and CP Chem’s new $8.5 billion petrochemical project near the Texas-Louisiana border.
“We’re maintaining capital discipline while investing to grow both traditional and new energy supplies,” said Chevron Chairman and CEO Mike Wirth. “Our 2023 capex budgets are consistent with our long-term plans to safely deliver higher returns and lower carbon.”
Houston-based midstream company Kinder Morgan Inc. (NYSE: KMI) also laid out its 2023 forecast Dec. 7. KMI aims to invest $2.1 billion in expansion projects, contributions to joint ventures and lower-carbon developments next year.
KMI is assuming average annual prices for West Texas Intermediate crude of $85 per barrel in 2023 and average Henry Hub natural gas prices of $5.50 per million British thermal unit.
“We expect 2023 to be another very good year for Kinder Morgan, with strong market fundamentals; continued robust growth in demand for existing and expanded natural gas transportation, storage and gathering and processing; and continued demand for refined products midstream services and investments in our Energy Transition Ventures business,” said KMI CEO Steve Kean.