Chevron Corporation has made its first-ever reduction in capital spending since the Covid-19 oil crash, signaling a cautious approach to investing amid declining energy demand and prices. The US multinational oil company announced the cut as part of its 2023 budget review.
Chevron’s move comes amidst a slowdown in global oil demand due to various factors such as rising fuel efficiency standards, increasing competition from renewable energy sources, and economic uncertainty. As a result, many oil producers have been forced to reassess their investment strategies and adjust their spending plans.
The reduction in capital expenditure is expected to impact Chevron’s projects, including those focused on growth opportunities and emerging technologies. While the company has not specified the exact amount of the cut, industry analysts believe it may be substantial, reflecting a more conservative approach to investing in the face of uncertainty.
Chevron’s move serves as a reminder that the energy sector is facing unprecedented challenges, from shifting consumer behavior to technological advancements. As companies navigate these changes, they must carefully balance their spending priorities with the need for long-term sustainability and growth.
Source: https://www.ft.com/content/54c38547-df13-43c6-a6ee-16108b4943e4