By Sabrina Valle
HOUSTON (Reuters) – The largest oil company Chevron Corp (NYSE:) on Tuesday raised its share buyback program and reaffirmed its output guidance of more than 3% annual growth by 2027 as spending ramps up in the United States.
Chevron increased its share repurchase rate by 17% to $17.5 billion a year starting next quarter and doubled the annual range to between $10 and $20 billion by 2025, assuming prices between $50 and $70 per barrel, compared with about $80 now.
The shares rose 1.5% to $165.20 in premarket trading.
This year’s spending will be near the upper limit of its guidance of $15 billion to $17 billion through 2027, with a larger share in the United States, the company said. Chevron reaffirmed a plan to reach 1 million barrels a day of oil and gas from the US Permian shale basin by 2025.
Outlays on oil operations in Kazakhstan were down by about $500 million and should drop by another $1 billion, leaving more room to invest elsewhere, the company said.
In January, Chevron tripled its budget for buybacks to $75 billion with no set expiration date. Last year, the company posted record profits that allowed it to authorize payment to the most ambitious shareholders among Western oil producers.
Major Western oil companies paid a record $219 billion in dividends and share buybacks to investors in 2022, prompting outraged calls for governments to impose extraordinary taxes on the industry to help consumers with the costs of energy.
Last year, Chevron returned $26 billion through dividends and buybacks to shareholders and invested $15.7 billion in operations.
“Chevron intends to be a leader in both traditional and new energy businesses,” Chief Executive Officer Mike Wirth said in his prepared remarks.
“This year we will use four grid-fed rigs and one boosted fracking. About 40% of our grid-supplied power will be wind and solar,” the company added.