Chevron will prioritise boosting shareholder returns over production growth over the next five years, according to a new business plan that emphasises cutting costs and reducing capital expenditure.

The US oil major said yesterday that it expected to increase earnings per share and free cash flow by more than 10 per cent a year to 2030 at an average Brent crude price of $70 per barrel. Oil and gas production is forecast to rise 2-3 per cent annually over the same period, with the company cutting annual capital expenditure by about $1bn to a range of between $18bn and $21bn.

Chevron’s focus on sweating assets to boost profits contrasts with that of larger rival ExxonMobil, which has been increasing capital investment to boost production despite sliding oil prices.

“It’s modest growth. We’re focused on growing free cash flow, not volume. That’s the difference,” Eimear Bonner, Chevron chief financial officer, said in an interview ahead of an investor day in New York. She added: “It’s much more value-focused: growing free cash flow, growing earnings, growing returns, improving [return on capital employed], doing that by getting more capital efficient, more cost competitive. So, it’s not a volume story for us, it’s a value story.”

Chevron plans to continue to buy back an annual $10bn to $20bn of its shares through to 2030, assuming average oil prices of between $60 and $80 per barrel. Brent at present trades at $64.75 per barrel.

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OXY CFO also said they would be lowering capital spending next year and focusing on improving balance sheet and shareholder returns over increasing production.

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