During its Energy Transition Spotlight, Chevron Corporation, one of the world’s largest integrated energy companies, has announced plans to invest more capital to grow lower carbon energy businesses.“Chevron intends to be a leader in advancing a lower carbon future. Our planned actions target sectors of the economy that are harder to abate and leverage our capabilities, assets, and customer relationships, said Michael Wirth, Chairman, and CEO of Chevron.
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Chevron announced its plans during its Energy Transition Spotlight with security analysts which took place on September 14, 2021, and set the following 2030 growth targets for new energy businesses:
- Grow renewable natural gas (RNG) production to 40 000 MMBtu per day to supply a network of stations serving heavy-duty transport customers;
- Increase renewable fuels production capacity to 100 000 barrels per day to meet growing customer demand for renewable diesel and sustainable aviation fuel (SAF);
- Grow hydrogen production to 150 000 tonnes per year to supply industrial, power, and heavy-duty transport customers; and
- Increase carbon capture and offsets to 25 million tonnes per year by developing regional hubs in partnership with others.
To achieve this scale, the company expects to invest more than US$10 billion between now and 2028, including US$2 billion to lower the carbon intensity of Chevron’s operations. This is more than triple the company’s previous guidance of US$3 billion.
Renewable fuels, hydrogen, and carbon capture target customers such as airlines, transport companies, and industrial producers. These sectors of the economy are not easily electrified, and customers are seeking lower-carbon fuels and other solutions to reduce carbon emissions, said Jeff Gustavson, President of Chevron New Energies.
At a Brent oil price average of US$60 per barrel, the company reaffirmed its expectation to earn a double-digit return on capital employed by 2025 and generate US$25 billion of cash flow, above its dividend and capital spending, over the next five years.
The company also reaffirmed its 2028 upstream production greenhouse gas (GHG) intensity targets, which equate to an expected 35 percent reduction from 2016 levels.
With the anticipated strong cash generation of our base business, we expect to grow our dividend, buy back shares and invest in lower carbon businesses. We believe a strategy that combines a high return, lower carbon traditional business with faster-growing, profitable new energy ones positions us to deliver long-term value to our shareholders, Michael Wirth concluded.
