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Chevron ( CVX ) 2030 plan underscores efficiency drive

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Oil and gas production to grow 2%-3% annually

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Chevron ( CVX ) to reduce capex, increase cost-reduction target

By Sheila Dang

HOUSTON, Nov 12 (Reuters) - Chevron ( CVX ) said on

Wednesday that it plans to grow free cash flow by more than 10%

annually through 2030 and increase oil and gas production, while

further reducing costs and capital expenditure.

The fresh guidance announced on Chevron's ( CVX ) investor day is

the culmination of an effort by the U.S. oil producer to operate

more efficiently following a restructuring that included layoffs

earlier this year.

The company closed its $55 billion acquisition of Hess in

July after a year's delay, which had prevented it from giving

long-term financial guidance until now. Its shares have risen

7.8% year-to-date, underperforming rival oil producers Exxon

Mobil ( XOM ) and Shell.

"Our advantaged assets, balance sheet strength and

disciplined capital program provide the foundation to thrive in

any price environment," Chief Financial Officer Eimear Bonner

said in a statement.

Assuming Brent crude prices of $70 per barrel, Chevron ( CVX ) said

it expects to grow both free cash flow and earnings per share by

over 10% annually through the end of the decade.

Oil and gas production will grow by 2% to 3% per year,

Chevron ( CVX ) said. The company currently produces 4.1 million barrels

of oil equivalent per day.

TECH AND RESTRUCTURING TO HELP CUT MORE COSTS

Chevron ( CVX ) is reducing planned capex spending to a range

between $18 billion and $21 billion per year, down from the

previous guidance of between $19 billion and $22 billion.

The company also increased planned cost reductions to

between $3 billion and $4 billion by the end of next year, up by

$1 billion from the previous target.

Upstream divestments and efforts to simplify the business

will result in $2 billion in cost reductions at the end of this

year, Bonner said in an interview. Using technology across the

business, including to remotely monitor operations, will help

save another $1 billion, she said.

"We're confident in increasing (the range) because we're

already halfway there with the work that's underway," Bonner

said.

Chevron ( CVX ) said it will be able to cover its capex and dividend

through 2030 even if Brent crude prices are around $50 per

barrel.

FORGING AHEAD ON POWER PROJECT AND EXPLORATION

Chevron's ( CVX ) first project to power an AI data center using

natural gas will be built in West Texas with the goal of

start-up by 2027. Negotiations are underway to secure a customer

and reach a final investment decision early next year, Bonner

said.

Rapid AI development has led to a boom in electricity demand

to power data centers. Chevron ( CVX ) has had discussions with major

tech firms such as OpenAI and Meta.

The company will detail plans to improve its exploration

work when it meets with investors later on Wednesday in New York

City.

Bonner said Chevron ( CVX ) will increase annual spending on

exploration and also use AI to more quickly analyze data, as

exploration projects can traditionally take years to complete.

(Reporting by Sheila Dang in Houston; Editing by Nathan Crooks

and Muralikumar Anantharaman)