Chevron sets out ambition to double returns and lower carbon emissions

The US oil major Chevron announced Tuesday plans to double its return on capital employed by 2025, while at the same time setting more ambitious carbon reduction targets for 2028, including a 35% reduction for its oil and gas operations compared to 2016 levels.

The company plans to spend $14-$16 billion on organic capital and exploration as part of a more capital-efficient program and estimates synergies of $600 million from its acquisition of the trading company Noble Energy last year.

"Chevron's message to investors is summarized in four words – higher returns, lower carbon," said Michael Wirth, Chevron's chairman and CEO.

"We're building on our track record of capital and cost discipline to deliver higher returns. And we're taking action to advance a lower carbon future."

Its targets of doubling return on capital and generating 10% growth in free cash flow by 2025 are dependent on a Brent crude oil price of $50/bbl.

The company expects to increase investments in its most efficient fossil oil-producing assets such as in the Permian Basin in the US, but also to cut overall emissions in its oil and gas business to 24 kilograms of emissions (CO2e) per barrel of oil equivalent.

It also wants to achieve 3kg CO2e from flaring by 2028, a 65% cut from 2016, zero routine flaring by 2030 and 2kg CO2e for methane intensity by 2028.

Cuts will be realised through plans to increase renewable energy and carbon offsets as well as investments in lower carbon-intensive technologies such as hydrogen and carbon capture, utilisation and storage (CCUS).