NEW YORK (AP) — Chevron is cutting its spending budget by nearly 40 percent for 2017 and 2018 as it deals with plunging oil prices, a bigger cut in spending than it previously expected.
The oil and gas company said that it expects to spend between $17 billion and $22 billion on drilling and other projects in 2017 and 2018, lower than the $20 billion to $24 billion range the company had expected in October. The company has a spending budget of $26.6 billion this year, down 24 percent from the year before.
“Industry conditions are tough right now,” said Chevron chairman and CEO John Watson, in a statement Tuesday.
Watson also affirmed dividend growth and maintenance of a strong balance sheet as among the company’s financial priorities. Chevron currently pays a quarterly dividend of $1.07, which it last increased in the first quarter of 2014.
Several energy companies have announced plans to trim spending due to lower oil prices. Chevron Corp., based in San Ramon, California, has also cut jobs and sold some of its facilities and pipelines to raise cash.
Shares of Chevron fell $2.03, or 2.2 percent, to $88.64 in morning trading Tuesday. The stock is down about 14 percent in the last year.