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Chevron chairman and CEO John Watson. Image courtesy of Chevron.

Chevron said Thursday that it plans to spend nearly $20 billion next year on capital and exploratory expenses.

The company has set its 2017 capital and exploratory investment program at $19.8 billion, including $4.7 billion of planned affiliate expenditures.

Chevron’s upstream business will be allotted $8.5 billion of planned capital spending related to base-producing assets.

That amount includes about $2.5 billion for shale and tight investments, with the majority of that spend slated for Permian Basin developments in Texas and New Mexico.

Chevron chairman and CEO John Watson said that over 70 percent of the company’s planned upstream investment program is expected to generate production within two years.

An additional $7 billion of the planned upstream program will be tied to major capital projects currently underway.

Those funds include $2 billion toward the completion of the Gorgon and Wheatstone LNG projects in Australia and $3 billion of affiliate expenditures associated with the Future Growth Project-Wellhead Pressure Management Project at the Tengiz field in Kazakhstan.

Global exploration funding accounts for about $1 billion of the total upstream budget.

The remainder of the budget is primarily tied to early stage projects supporting potential, future development opportunities, Chevron said.

The latest budget marks the fourth straight year of spending reductions.

Watson said that the combination of lower spending and production revenue growth supports the company’s plan to become cash balanced in 2017.

“Our spending for 2017 targets shorter-cycle time, high-return investments and completing major projects under construction…. Construction is nearing completion on several major capital projects, which are now online or expected to come online in the next few quarters,” Watson added.