Chevron announced last week a $14-billion budget for next year that reflects its need to complete a major project in Central Asia before it can unleash more of its capital power on the Permian Basin. The new figure also represents a significant reduction from the previously announced spending plan involving $19 to $22 billion, JPT reported.

Chevron points out that the previous spending estimates did not take into account the cost of operating Noble Energy’s assets, underlining the depth of the revised budget. The $4.1-billion all-stock acquisition of Noble, which was purchased for its fields in the Permian Basin and offshore Israel, was completed in October.

The San Ramon, California-based supermajor said its long-term plan is to spend $14 to $16 billion annually from 2022 to 2025.

“Chevron remains committed to capital discipline with a 2021 capital budget and longer-term capital outlook that are well below our prior guidance,” Michael Wirth, CEO of Chevron, said. “With our major restructuring behind us and Noble Energy integration on track, we’re prepared to execute this program with discipline.”

Chevron’s breakdown for its 2021 budget includes $11.5 billion dedicated to its upstream operations and another $2.1 billion allocated to its downstream business. An additional $300 million will go toward investments “to advance the energy transition,” the company said.

About $6.5 billion of Chevron’s upstream budget will be used to support producing assets, including $2 billion that has been earmarked for tight-oil developments in the Permian where the company pumped out an average of 222,000 B/D of crude in 2019.

Another $1.5 billion of the 2021 budget will be used for exploration, early-stage projects, and midstream activities. Of the $3.5 billion needed to fund ongoing capital projects, Chevron said about 75% will be spent at the Tengiz field in Kazakhstan where Chevron holds a 50% interest.