Chevron has cut its 2021 capital and exploration spend to $US14 billion and slashed spending for 2022 to 2025 by $US20 to $US24 billion.
The long-term cuts are a clear sign that the US company expects the slump in oil and gas prices and demand caused by the pandemic to last for some time.
"Chevron remains committed to capital discipline with a 2021 capital budget and longer-term capital outlook that are well below our prior guidance," Chevron chief executive Mike Wirth said.
Wirth said Chevron was committed to maintaining dividends to shareholders.
Chevron senior managers are known to be proud of being classified as a dividend aristocrat: a company that increases its annual dividend each year for more than 25 years, regardless of business conditions.
"We took early and swift action at the beginning of the pandemic to prudently allocate capital, reduce costs and protect our industry-leading balance sheet," Wirth said.
That action included a five-month process to trim its Australian workforce from that ended in September with the loss of about 700 jobs.
The budget cuts come despite Chevron now being a bigger company after it acquired Noble Energy in July for $US5 billion.
Over 2022 to 2025 Chevron will spend between $US14 and $US16 billion a year, significantly down from the previous plan of $US19 to $US22 billion which excluded Noble Energy.
In 2022 Chevron will spend $US6.5 billion of its $US14 billion budget on international upstream assets that include the Gorgon and Wheatstone LNG projects in Australia. About $US2.6 billion of this non-US spend is for the Tengiz oil project in Kazakhstan.
Wirth said Chevron would prioritize investments that it expected to grow long-term value, deliver higher returns and lower carbon.
The 2022 budget included $US300 million, or two per cent, to "investments to advance the energy transition."
Chevron's next significant spend on its Gorgon and Wheatstone LNG projects in Australia is subsea compression on the Jansz-Io field to ensure the Gorgon LNG plant is kept fully supplied with gas.
The innovative project is awaiting a decision by Chevron and its partners ExxonMobil and Shell to proceed with front end engineering and design.
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Main image: First loading of LNG at Chevron's Gorgon project. Source: Chevron Australia Pty Ltd.